A rebound in Deutsche Telekom after its 7 per cent drubbing on Thursday provided the foundations for a recovery in Frankfurt.

At 5.30 p.m. German time, the Xetra DAX index was 44.66 higher at 6,919.20 while Telekom was 1.13 ahead at 59.83.

Analysts said investors took the view that Thursday's slide was overdone for a stock that was trading above 100 in early March.

The tumble was sparked by a report that Telekom planned a near $100 billion bid for Sprint, which earlier in the week abandoned plans to link with fellow US telecoms operator WorldCom. That news came on a bad day for European telecoms because of concerns at the sky-high cost of third generation mobile telephone licences.

Electronics components maker Epcos slid €7 to €104 on speculation that the company would report weaker than expected nine-month results in August.

On the Neuer Markt for growth stocks, biotech company MediGene soared to a high of €62.50 as it made its debut, a sharp premium to the €42 issue price. By the close, the shares were quoted at €60.78.

Paris unwound some of Thursday's losses as telecom and technology stocks bounced back. The CAC 40 index was 0.7 per cent higher at 6,446.54.

Alcatel was the strongest, closing 7.2 per cent higher at €68.70, although it was still down on the week. Alcatel was one of four telecom companies given an upgrade by Goldman Sachs. Many gainers were stocks that had fallen heavily the day before.

Amsterdam finished slightly stronger paring gains after the Dow opened weaker. The AEX blue chip index gained 0.8 per cent to 672.14.

Helsinki closed higher as the two leading companies rebounded, with the general index up 6.5 per cent at 15,205.1.