Lifted by Deutsche Bank and also DaimlerChrysler, Frankfurt spurted to a strong finish, with the Xetra DAX index adding 156.76 or 2.3 per cent at 7,126.13.
Deutsche Telekom continued to climb amid talk of an imminent ground-breaking acquisition. DaimlerChrysler gained €2.75 or 4.1 per cent to €69.85 amid strenuous denials that it was poised to link with Italy's Fiat.
Widely expected to use the proceeds of its Internet spin-off and withdrawal from the Global One telecoms consortium to launch a major takeover bid, Deutsche Telekom added €4.80 at €75.50 for a two-day advance of 13.9 per cent.
Zurich staged a strong rebound as Credit Suisse Private Banking called a halt to sales of Swiss stocks. A CSPB dealer said the group's portfolio of Swiss shares had now been run down to required levels. The SMI index jumped 149.8 or 2.2 per cent to 7,113.4. Some recent laggards were beneficiaries. Zurich Allied put on SFr11 to SFr781 (€483.95), while Novartis gained SFr24 to SFr2,133 (€1,321.73) after Bank Sarasin upgraded the stock.
Financials gained support from lower overnight US bond yields. UBS jumped SFr10.50 to SFr400 (€247.86) as more investors concluded that the share's recent foray below that level had been overdone.
Paris ended 42.03 better at 5,688.35 on the CAC-40 index. France Telecom surged €7.10 to €135 on plans to sell €20 billion of non-strategic assets following this week's deal to take full control of Global One, the business communications venture.
But computer services company Cap Gemini fell nearly 11 per cent after disappointing revenue forecasts and a lack of progress in negotiations with Ernst & Young. It closed at €224.10, a loss of €27.50, with 2.35 million shares traded.
Milan was higher as Fiat bounded 5.1 per cent ahead after local press reports that it was close to a merger with DaimlerChrysler. Fiat closed at €29.16. The Mibtel index put on 393 to 28,795.
Madrid's Ibex 35 index closed up 175.2 at 11,206.6, helped by heavyweight Telefonica, which rose €1.30 to €26.49.
