Investors in Frankfurt balanced a stronger euro against rising interest rates and German equities had a subdued session.

Siemens rose €3.45 to €166.90 following an upgrade to "market outperform" and an increase in target price to 190 by Goldman Sachs. The broker, which forecast strong medium earnings momentum, said that restructuring had won investors' confidence.

A mixed banking sector showed little reaction to the unexpectedly harsh 50 basis points tightening by the European Central Bank.

Deutsche Bank added 60 cents at €86.80, but the rest of the sector was dull. Dresdner shed 84 cents at €45.01. Paris spent the day flat although trading volumes were healthy. Technology-related stocks represented the bulk of the gainers, encouraged by the Nasdaq's positive opening and its 2 per cent gain the day before.

Cap Gemini more than reversed the previous day's losses and rose 5.5 per cent to €216.60, boosted by news that it would partner Liffe, the futures exchange in London, in an e-commerce venture. Alcatel gained 4 per cent to €64.15 and STMicro-electronics added 4.6 per cent to €71.10.

Among telecoms, Bouygues in particular strengthened as investors decided it would benefit from the way mobile phone licences are being allotted in France. Its shares rose 3.1 per cent to €724. France Telecom was 1.7 per cent stronger at €159.90 and Vivendi was 0.1 per cent up at €116.

Amsterdam rose 5.57 to 672.13 on the AEX index thanks mostly to strong runs for Philips and KPN. Philips rose 1.70 to €51.80 and KPN jumped 4.9 per cent or €2.40 to €51.70 amid rumours of an imminent link-up with Telefonica of Spain.

Elsewhere among technology stocks, ASM Lithography gained 2 to €41.60 following an upgrade to buy at Deutsche Bank and an increase in 12-month target price to €60.

Printing industry optimism got behind Oce, which rose 5.9 per cent or 90 cents to €16.10.