Shares in Frankfurt reversed a two-day downtrend with a rise of 3.1 per cent or 214.86 to 7,050.46 on the Xetra Dax index.

Deutsche Telekom led the rally with a surge of 8.1 per cent on renewed acquisition speculation. The shares ended €5.60 better at €75.

Mannesmann remained in focus ahead of next Monday's deadline for the bid from Vodafone AirTouch. The shares ended up €16 at an all-time high of €296.30.

Elsewhere among tech-related stocks, SAP rose €29.50 to €813 and Siemens €5.04 at €144.15. Cyclicals provided the heaviest losers. BASF shed €2.03 at €42.02 and Volkswagen came off €1.09 at €47.16.

Paris was driven by surging media and technology stocks. The CAC 40 index rose 113.6 to 5,773.42.

Vivendi gained €5.50 to €110.50. Canal Plus, which is 49 per cent owned by Vivendi, was up €25.50 or 15.3 per cent at €192 as analysts reconsidered its valuation in the light of the venture. Lagardere, which recently unveiled a digital TV alliance with Canal Plus, rose €2.90 at €82.50.

Pharmaceuticals group Aventis gained €1.90 to €56 after Goldman Sachs rated the stock as "outperform".

On the losing side, car parts maker Valeo tumbled €6.95 or 9.9 per cent to €63.05 after its 1999 results met with disappointment.

Madrid closed 134.8 higher at 10,970 on the Ibex-35 index as investors overcame concerns that the Fed was likely to raise US interest rates.

Telefonica led the way, gaining 97 cents to €26.87 amid a positive outlook for the European telecoms sector.

However, its Internet offshoot Terra Networks lost another 1.5 per cent after the 8 per cent fall on its Ibex debut on Monday. It was €1.30 down at €85.70.

Helsinki ended higher although Nokia, which constituted about 75 per cent of the day's trades, was slightly down.

Nokia announced strong profits for the last quarter of 1999 and the share price fluctuated between a new high of €197.40 and a low of €181.10 before finishing at €184.60, a loss of 80 cents. The Hex general index gained 74.97 to 15,067.50.