Technology shares had a good day as the improved interest rate picture fed through to the market mood. Some of the usual weathervanes of sentiment, such as Sonera and ASM Lithography, recorded double figure percentage gains.

Sonera was up 12 per cent to €26.30, ASM Lithography was up almost 10 per cent to €16.75 while Getronics, the Dutch IT services company that has taken a battering recently, rose 12.2 per cent to €6.80.

The sight of a successful technology IPO was another clear sign. Gemplus, the world's leader in smart cards, launched at 6 on the Paris bourse and closed at €7.50. However, earlier this month Gemplus had cut the offering's indicative price from €7.25-€8.25 to €5.75-€6.25.

Gemplus shares also started trading on Nasdaq in the US, where by midday they were at a premium of 28 per cent.

French data analysis software provider Business Objects rose 5.8 per cent to €87.50 after it announced a 3-for-2 stock split.

Telecoms companies were firm. France Telecom did particularly well, rising 11 per cent to €107.30. Part of this was a relief rally following the announcement by Morgan Stanley Capital International on changes to its indices. Although France Telecom's relatively low free float means its weighting will be cut, MSCI said the changes would not be implemented for another year. Some of the impact that had been priced in last week was consequently unwound.

The German telecom Mobilcom leapt 10 per cent to €40.30 in a technical reaction after losing more than 30 per cent last week amid fears it faced a financial squeeze and rumours that its chairman was on the point of resigning. The shares remain 80 per cent below their €210 peak in March.

German telecoms equipment maker Pandatel gained more than 11 per cent to €73.20, continuing to profit from talk of a possible takeover by Cisco Systems of the US. Pandatel said it had no knowledge of takeover plans. Its shares peaked at €195 in February.