Trading in Paris was listless as the half-day holiday in the US drained the market of volume. The CAC 40 index rose 1 per cent to 6,508.47. The index was boosted by heavyweight France Telecom which rose 1.7 per cent to €148.90 after its mobile subsidiary Orange announced record new subscriber figures for May.

Peugeot Citroen was up 5.6 per cent to €222, helped by a $410m investment in Argentina which it said would double its production for domestic and foreign sales.

Internet services company Infosources was again under pressure, down 5 per cent at €14.29, as investors pondered the deal announced last week with Belgian telecoms operator Belgacom to merge.

In Frankfurt, the Xetra Dax was 35.02 higher at 6,933.23. Retailer Metro shot up €2.25 to €39.24 as the company declined to comment on a British weekend press report that the group might be planning to sell its Real hypermarket chain to UK supermarket group Tesco.

In the Neuer Markt, biotechnology company Analytik Jena soared to a high of €34.30 as it made its debut, a sharp premium to the €24 issue price. By the close, the shares were quoted at €32.60.

Amsterdam shares fell 0.6 per cent on the AEX index in light volumes.

KPN Telecom was down 3 per cent to €45.45 as it pulled out of bidding for Slovak Telecom and felt the effect of the mobile phone licence auction which starts on Thursday.