Europe made only modest gains yesterday as better sentiment in technology stocks was countered by disappointment over the European Central Bank's failure to cut interest rates.

Techs gained from another good start on the Nasdaq which built on positive morning sentiment. Nokia rose 4.6 per cent to €29.95 and Alcatel was up the same amount to €36.02.

Philips, Europe's third-largest chipmaker, rose 8.7 per cent to €33.55, while ASM Lithography, maker of chip equipment, was up 8.2 per cent at €27.05. Telecoms were more mixed, with both Deutsche Telekom and France Telecom lower following two days of good gains, while other smaller stocks rose. Deutsche Telekom was down 2.7 per cent at €28.40 and France Telecom off 1.2 per cent at €75.50.

Among technology stocks, Germany's Epcos, which makes components for the telecoms industry among others, was up 5.8 per cent at €66, while Siemens rose 3.7 per cent to €124, making a rise of 14 per cent in the past week.

Belgian heavyweight Fortis ran into profit-taking. It had risen strongly in recent weeks amid merger speculation in the sector sparked by the planned tie-up of Germany's Allianz and Dresdner Bank. The shares lost 3.8 per cent to €29.20. The stock gained more than 18 per cent since closing at its low for the year on March 22nd.

Swiss pharma group Roche put on 3 per cent to SFr12,210 after the group said key drugs sales declined in the first quarter, although overall sales rose slightly. Commerzbank Securities raised its recommendation on the stock, saying it was confident the first quarter would mark the low point in pharmaceuticals sales growth for the year.

Deutsche Post was under pressure on worries that fines resulting from several European Commission anti-trust cases could hit its earnings hard this year. The shares fell 2.8 per cent to €18.58.