Volkswagen moved into overdrive following a set of results that comfortably outstripped broker expectations and cast a rosy glow over large sections of the motor sector.
VW jumped 3.1 per cent to €59.10 and Daimler-Chrysler added 2.5 per cent at €56.55. Peugeot, which reports full year figures today, gained 3.4 per cent to €287.50.
The steel sector saw some of the hottest action of the session with Usinor, Arbed and Aceralia all storming ahead from the opening bell as investors and analysts unanimously applauded their decision to merge.
In terms of steel output the combination will be almost twice as big as its nearest rival, South Korea's Posco, and will in the words of one broker "obviously have all manner of scope for cutting out unwanted production".
Deutsche Bank said the potential synergies had been calculated on a very conservative basis and would come through more quickly than the merging companies thought.
It saw the deal as making perfect sense. Usinor ended 7.3 per cent higher at €15.07. Arbed galloped ahead to €130 before closing up 46.8 per cent at €124.80. Aceralia finished 27.6 per cent higher at €14.20.
Most telecoms leaders rallied, rebounding gently from recent lows in modest buying. There was little news driving the sector and the rally was immediately dubbed by brokers as an "uptick for sentiment" after the savage shakeout of recent sessions.
France Telecom rose 1.1 per cent to €68.85 and KPN 2.2 per cent to €13.26. Hit by debt-led earnings concerns, both stocks are but a pale shadow of 12-month peaks of €219 and €75.63 respectively. Deutsche Telekom shed 0.2 per cent at €26.95.
Europolitan jumped 5.6 per cent to SKr65.50 after Goldman Sachs put its weight behind the stock by initiating coverage with a "market outperform" rating.
The equipment producers tracked the operators' upturns, with Nokia and Ericsson all well dealt.
