Disappointing figures from Danone soured the mood in the food and beverages sector. A 5 per cent rise in nine-month turnover at the food, biscuit and bottled water group failed to live up to expectations, and biscuit sales were also weaker than expected.

The shares fell 8.2 per cent to €131.30 as the results brought a raft of downgrade recommendations, forecasts and share price targets from brokers.

Consumer products leader Unilever edged up 0.7 per cent to €60.95. It warned late last month that the US attacks would hit its prestige fragrances and US food services business. But elsewhere in the sector, NestlΘ fell 2.2 per cent to SFr335.50 (€226.12).

European technology stocks were strong from the start, encouraged by the Nasdaq's overnight performance and strong Nasdaq futures which signalled further gains to come.

T-Online, Germany's largest internet service provider, shot up 11.9 per cent to €7.80 after internet media giant Yahoo maintained it could achieve existing operating profit goals for the year.

Media stocks continued to press ahead for a second day. Vivendi Universal gained 4.7 per cent to €52.70 after media mogul Rupert Murdoch told shareholders in News Corp that he stood by the group's recently-revised profit forecast and pointed to a slight pick-up in the advertising market.

In the pharmaceuticals sector, Novartis put on a healthy 3.3 per cent rise to SFr64.30 after the group posted an 11 per cent rise in nine-month sales and said it was on track to post record 2001 results as drugs sales continued to generate double figure growth rates.

Among financials, insurer Axa jumped 3.2 per cent to €24 as the group confirmed plans to cut operating costs by 10 per cent next year in the aftermath of last month's terrorist attacks. Munich Re gained 2.9 per cent to €305.31.