Bourses soar on rising hopes over US outlook

European equity markets registered further confident gains on the growing conviction that US interest rates may not after all have to rise substantially in coming months.

The advance was broadly based, with Paris, Stockholm and Helsinki all moving into previously uncharted territory.

The FTSE Eurobloc 100 index put on 16.80 to 1,123.87 while the FTSE Eurotop 100 index gained 53.94 at 3,099.24. The FTSE Eurotop 300 index rose 23.52 to 1,341.80.

Paris outperformed most of its neighbours, climbing 3 per cent to close at a second consecutive all-time high as a sharp decline in long-term market rates helped equities to soar. The CAC-40 index finished 140.00 higher at 4,888.62.

France Telecom strode on ahead, adding €3.35 to €91.85 with many investors willing the stock to hit the magic €100 level soon.

Financials benefited from a sharp decline in long-term market rates while the retail sector benefited from evidence of a stronger economic recovery. BNP continued its strong run, up another €2.85 or 3.5 per cent to €83.50, still boosted by the prospect of its entry into the EuroStoxx 50 index and by waning fears about a possible rise in rates.

Against the trend, Bouygues made a disappointing start as a CAC-40 stock, slipping €12 to €331.

Stockholm closed at an all-time high as foreign investors continued to target Ericsson amid optimism about the outlook for the world's third-largest mobile phone maker.

Ericsson's shares jumped 12.50 Swedish krone or 3.7 per cent to a record SKr342 (€39.52).

Helsinki extended its record-setting run into a second consecutive session as bourse engine Nokia continued to plough ahead. The Hex general index topped the 9,000 level for the first time, closing 278.96 or 3.2 per cent higher at 9,051.19.

Frankfurt was higher as interest-rate sensitive financials gained ground. The Xetra DAX index closed 46.51 higher at 5,525.40.

Munich Re put on €6.72 to €216.70 while Dresdner Bank gained €1.45 to €48.95.

Deutsche Bank put on €1.59 to €67.98 but Allianz gave up €2 to €288.10 after Deutsche sold five million shares in Germany's largest insurer to international investors.

Deutsche Telekom slipped 24 cents to €43.85 in a further setback after Thursday's weaker than expected nine-month sales.

Amsterdam ran out of steam late in the session, erasing most of its early gains to close narrowly ahead as investors squared positions for the end of the month. The AEX index finished 3.86 higher at 571.82, off a high of 575.82.

Financials remained at the centre of attention. Fortis led the sector with a €1.53 or 4.9 per cent rise to €32.73.