Interest rate rises do little to deter bourses

Taking the news of higher European interest rates in their stride, leading bourses surged to new highs on a day of often frantic activity. By the close of trading, the FTSE Eurobloc 100 index was up 2.3 per cent at 1,408.20 while the FTSE Eurotop 100 index gained 1.1 per cent at 3,624.33. The FTSE Eurotop 300 index improved 0.8 per cent to 1,550.12.

Electronic and electrical equipment was the top performing sector, thanks to powerful runs by Switzerland's ABB and Dutch giant, Philips.

Frankfurt rose 2.5 per cent to a record 7,354.26 following a dramatic surge for Deutsche Telekom, the index's top weighting.

Telecoms stocks dominated trading on a day of high drama for the sector with Deutsche Telekom and Mannesmann racking up a combined volume 26 million shares.

Telekom rose €9.40 or 12.7 per cent to €83.70 as talk of Mannesmann's exit from the Xetra DAX index, as a result of the Vodafone AirTouch takeover bid, sparked heavy buying by investors determined to keep a strong telecoms presence in their portfolios.

Mannesmann fell to €293.20 before rebounding in late trading to close up 50 cents at €325.50 on active arbitrage trading amid mounting speculation that Vodafone AirTouch was about to pull off a deal.

BMW jumped €1.42 to €25.70 in spite of a denial from the Quandt family, which owns 48 per cent of BMW, that it was "in talks" with US motor giant General Motors.

Paris was once again the hottest market in Europe, breaking the 6,000 barrier for the first time. Volume was a record 49.2 million shares.

Media, telecoms and technology sectors led the charge. Canal Plus made good further progress after a hesitant start and closed up €16.30 at €249, a 7 per cent rise.

Amsterdam rose 3.3 per cent, with a rebound for financials, lifting the AEX index 20.44 to 649.59. With the rise for European interest rates seen as clearing away many of the prevailing monetary uncertainties, Aegon jumped €4.30 or 5.7 per cent to €80 and ING €2.27 to €54.30.

Milan closed at an all-time high, with trading volumes also at record levels. The Mibtel index closed 655 or 2.2 per cent higher at 30,122.