Xetra DAX: 4657.86 (+191.68); CAC-40: 3492.51 (+97.17)

Shares in Deutsche Bank shot up in Frankfurt as the market weighed a report that it was in preliminary take-over talks with Bankers Trust, the seventh largest bank holding company in the US. The Xetra DAX index climbed more than 4 per cent to its highest close this month. The index rose 191.68 to 4,657.86 as early strength in banking and motor stocks was reinforced by Wall Street's confident start.

Deutsche put on 7.51 deutschmarks to DM102.95 in spite of scepticism from analysts, one of whom said that such a take-over would, if anything, be negative for the German group. Other financials throughout much of Europe followed in Deutsche's wake.

Dresdner Bank rose DM5.78 to DM66.50, Commerzbank added DM2.78 to DM50.10 and HypoVereinsbank put on DM10 to DM141.50. Among the insurers, Allianz was DM24.10 higher at DM554.

Paris went along with its neighbours and the CAC-40 index closed 97.17 higher at 3,492.51.

Among its sharply higher banks, Societe Generale shot up 63 francs to Ffr782, BNP climbed Ffr23.90 to Ffr356.90 and Paribas was Ffr19 higher at Ffr400. Among the insurers, Axa climbed Ffr28 to Ffr620.

Zurich looked to financials for support and the SMI index finished 183.7 higher at 6,194.0.

Nestle was another strong performer, gaining 82 Swiss francs to Sfr2,837. ABB rebounded Sfr42 to Sfr1,509 ahead of nine-month figures due today.

Amsterdam was led by a strong gain in banks, and the AEX index closed up 33.59 to 975.03.

Among financials, ABN Amro, the volume leader, rose 1.80 guilders to Fl34.70, ING added Fl4.20 to Fl90.10 and Fortis put on Fl5.30 to Fl114.20.

KPN Telecom jumped Fl5.70 or 8.7 per cent to Fl71.30.