Wall Street's record high on Friday and the broad view among investors that the outlook for global interest rates was officially benign continued to lift European markets.
The FTSE Eurobloc 100 rose to a best ever level of 1,137.86, up 1.9 per cent. The FTSE Eurotop 100 index added 1.9 per cent to 3,161.53 while the broader FTSE Eurotop 300 improved 1.7 per cent to 1,369.87.
Frankfurt continued to push into record territory, adding a further 106.57 to 5,625.62 on the Xetra Dax index to extend its recent rally to 202 points or 3.7 per cent in five days.
Helping the improved interest rate climate, top insurer Munich Re was the best performing stock, adding €9.90 at €195.60. Telecoms group Mannesmann gained €7.15 to €157.95. Karstadt rose €4.05 to €473 and diversified leisure group Preussag, responding to renewed talk of further acquisitions, added €2.65 at €54.95.
Motor giant DaimlerChrysler made it clear that its US integration was "going well" and improved €1.91 to €87.51 in the process.
Paris surged to another all-time closing high after it emerged that Total,,the oil group, had launched a €42 billion hostile bid for rival Elf- Aquitaine. The takeover attempt, long the subject of market rumours, helped send the CAC-40 index 77.17 or 1.7 per cent higher to 4,697.84.
Elf accounted for more than two-thirds of the CAC-40's gain, soaring 31.40 or 21.5 per cent to €177.30. Total closed 50 cents or 0.4 per cent up at €128.50.
Elf shares ended €8.6 above the price implied by Total's bid, reflecting a belief that a third party might come in with a higher offer.
News of the deal helped send Sanofi-Synthelabo, the pharmaceuticals group, lower on worries that it might result in Elf speeding up the sale of its stake in the company. Sanofi shares fell €2.45 or 5.8 per cent to €40.05.
Amsterdam rose 10.03 or 1.8 per cent to 582.05 on the AEX index after heavy demand for leading blue chips. Philips jumped €3.85 or 4 per cent to €100.45 and Royal Dutch €1.20 to €60. In spite of losing a court ruling to margarine rival Raiso of Finland, Unilever rose €1.90 to €69.20, helped by a broker earnings upgrade.
Foods group Wessanen jumped 50 cents to €12.80, but leading brewer Heineken came off 80 cents at €49.70.
Merger partners Pakhoed and Van Ommeron were the stars. Both surged more than 17 per cent, Pakhoed gained €3.95 to €26.75 and Van Ommeron rose €5.50 to €34.90.
Zurich pressed 1.2 per cent ahead although the absence of Wall Street kept volumes low. The SMI index finished 86.0 higher at 7,292.2.
Growing expectations for half year results helped the banks. CS Group jumped SFr10 to SFr295. UBS put on SFr8.50 to SFr493.50. It added SFr5 after the Swiss Banking Commission said a study had found the merged UBS had adequate safeguards in its investment banking activities. It was completed in the wake of losses tied to US hedge fund Long-Term Capital Management.
Insurer Zurich Allied rose SFr12 to SFr947 and Swiss Re put on SFr31 to SFr3,129.
Among the pharmaceuticals, Novartis rose SFr21 to SFr2,418 after Bank Pictet raised its rating for the group to "priority buy".
Nestle was flat at SFr2,941 as Morgan Stanley Dean Witter said it had raised its share price target for the food and beverages group to SFr3,100 from SFr3,000.
Milan pushed 1.9 per cent higher, led ahead by an outperforming Eni as the oil sector surged on the back of TotalFina's takeover bid for ElfAquitaine in France.
The real-time Mibtel index put on 466 or 1.9 per cent to 25,294, while Eni shot up 4.6 per cent to €6.04.
Electric power groups were another bright spot. Edison rose 4.4 per cent to €9.14, while the Milan utility, AEM, put on 6.7 per cent to €1.85.
Olivetti put on 3.5 per cent to €2.47 and Tecnost was 5.4 per cent higher at €2.55, with the rights for Olivetti's capital increase no longer traded on the bourse.
Madrid rallied with other European markets, lifted by a strong gain for Repsol, the oil group, on news of Total's hostile bid for Elf-Aquitaine.
The general index ended 12.46 or 1.4 per cent up at 935.03.
Repsol, which has performed powerfully since the news in April of its $13 billion takeover of YPF of Argentina, climbed another 87 cents or 4.4 per cent to €20.75. News of the Total bid helped offset investor concerns about the capital-raising exercise Repsol has launched to part-fund the YPF acquisition.
Telepizza, the fast food chain that was the best performer on the Spanish market last year, continued its wretched progress in 1999. The shares lost 30 cents or 6.1 per cent to end at €4.64, about half their value at the start of the year. The company has suffered from concerns about its vending pizza unit, as well as a negative market reaction to its chairman's decision last month to sell part of his stake.
Athens broke through resistance and pressed well into record territory, settling 4.8 per cent higher after a surge of merger activity in the banking sector. The general index finished 197.58 higher at a record 4,350.13. An intra-session high of 4,351.37 also erased the May 24th alltime best of 4,272.18 points.
