Technology stocks rebounded from recent sharp falls, taking their cues from the continuing rally on the Nasdaq.

The sector was also responding to Wednesday night's comments by Mr John Chambers, chief executive of Cisco, who said he was comfortable with analysts' first-quarter earnings estimates.

Chip-maker STMicroelectronics rose 16.25 per cent to €27.90, while ASML was up 16.4 per cent to €14.15. Nokia rose 13.3 per cent to €18.70 and Philips gained 10.3 per cent to €23.37.

French engineering company Alstom, which has fallen more than 50 per cent following worries about its exposure to the collapse of a cruise company, yesterday jumped 14 per cent to €14.79.

In telecommunications, France Telecom added 7.4 per cent to €35.23 and Deutsche Telekom was up 2.8 per cent to €17.50 in late trade. KPNQwest rose 8.7 per cent to €4.77, while KPN was up 3.7 per cent at €3.11.

In software stocks, SAP was 3 per cent higher at €132. But the Swiss banking software provider Temenos closed down 45 per cent to 5.60 Swiss francs, having touched an all-time low of SFr3.80 after it scaled back its growth outlook.

Among airlines, Air France fell 1.1 per cent to €12.10, while Lufthansa added 1.3 per cent at €10.67. KLM was up 1.2 per cent at €8.80. Alitalia was suspended at €0.90 (up 23.4 per cent) ahead of a statement from the company that most traders understood would be news of a radical business shake-up. Swissair jumped to nine Swiss francs at the opening amid talk of an imminent alternative to the bank-led salvage plan for the bankrupt carrier, but fell back in later trading to finish off 6.2 per cent at SFr6.10. Crossair, which is taking over a truncated Swissair operation under the salvage plan, rose 32.4 per cent to 450 Swiss francs, for a two-day gain of more than 50 per cent.