Cyclical stocks found support as increasingly risk averse investors sought safe havens.

Lehman Brothers raised the exposure of its global equity portfolio to cyclicals this week on expectations that global growth was set to slow but outright recession would be avoided.

"Cyclical stocks offer attractive value since they are discounting a much gloomier outcome for activity," said global strategist Joe Rooney. "The catalyst to drive cyclicals will be a lower oil price and the less hostile monetary stance that will flow from a deceleration in growth."

French aluminium producer Pechiney was a star performer, shooting up 8.6 per cent to €44 as it took a lead from Monday's strong run for its North American peers, Alcoa, Alcan Aluminium and Phelps Dodge. A rebound in aluminium prices also provided a spur.

News of a new chairman and chief executive provided the catalyst for a sharp rise in Ciba Speciality Chemicals. The shares put on 4.3 per cent to 108.50 Swiss francs on the appointment of vice-chairman Armin Mayer.

Analysts will also be looking for decisive action to underpin the share price which fell 19 per cent this year to a low of SFr94.25 in mid-October.

Dutch chemicals group DSM jumped 5.3 per cent to €34 as third quarter earnings beat expectations, due in part to growth in life science products and performance materials. The company unveiled a 45 per cent rise in third quarter operating profit to €182 million.

German industrial gas group Linde also impressed, rising 5.1 per cent to €50.85 after a Lehman Brothers upgrade and inclusion of the stock in its European recommended portfolio.

France's Air Liquide was 7.1 per cent higher at €139.30, boosted by solid sales figures after the market closed on Monday.

Elsewhere among cyclicals, Nordic forestry groups saw heavy demand after positive nine-month trading reports from companies in the last 10 days, and a surge for North American paper stocks overnight.

Telecoms equipment maker Alcatel roared to the top of the activity charts after a session characterised by wild share price swings.

Buoyed by strong results the stock shot ahead before succumbing to a combination of profit-taking and genuine selling on doubts about the transparency of the group's accounting.

Initial reaction to Alcatel's third quarter statement was bullish and amid a wave of positive broker comment the shares jumped to €75.45. By mid-session, however, the mood had soured and the shares slumped to €67.50.

Talk of a downgrade by a heavyweight US broker on the basis that Alcatel had flattered its third quarter out-turn by drawing in future revenue sparked a stampede of selling.