Investors in Frankfurt locked in profits from late morning onwards and the Xetra DAX index finished up 39.44 at 7,931.93 after a best of session 8,031.21.

News of the IG Metall pay settlement, which helped stabilise bonds and the euro, lent support to basic economy stocks. MAN added 70 cents at 38.90 and Thyssen Krupp 92 cents at 26.50. Linde eased 50 cents to 46.

Technology-related shares fared less well. Deutsche Telekom rallied strongly, rising 3.60 to 91.60, but SAP and Siemens lost ground while Epcos had a volatile ride, closing off 3 at 157.50 after hardening to 161 in early trading.

Paris closed higher, managing to hold on to most of its gains although it was pulled down by the early swings on Wall Street. The CAC-40 index added 73.45 to 6,524.30, just 20 points shy of its record close. Technology shares gained after the Paris Bourse unveiled a new technology index with 123 stocks called IT.CAC. France Telecom added 5.5 to 201 after reaching a high for the session of 207.50 and racking up turnover of 480 million shares.

Chip maker STMicroelectronics 3.80 to 214.40, network equipment maker Alcatel 3.10 to 243.10 and network services provider Equant 5.50 to 107 Lagardere continued its upward climb, adding another 3.80 to 94.30. Oil giant TotalFina, weak lately on oil price concerns, improved 4.30 to 143.

Amsterdam broke through to a record high with the AEX index rising 5.82 to 687.94 on strong performances by techs leaders Philips and KPN. Both stocks gained more than 3 per cent with the electronics giant adding 5.80 at 194.80 and telecoms leader KPN rising 4.65 to 138.50.

Milan found the effort of keeping its head above water too much in late trade although renewed confidence in techs kept the lid on losses. The Mibtel index finished 154 easier at 32,665.

Helsinki ended up 0.8 per cent in a see-saw session. The Hex general index added 141.25 to 17,790.24.