It was bounce-back day for Europe's telecoms stocks as US markets recovered, Microsoft soared and Nokia released encouraging figures for the third quarter.

Finland's mobile phone giant surprised the markets by bringing forward its results by a week. Lauri Kivinen, Nokia's chief spokesman, said: "We checked to see whether we could tie up loose ends to get the results to come out earlier, especially in the situation we're in now, where there's a lot of market volatility."

Profits were above forecasts and the growth outlook was reaffirmed, helping shares jump 22 per cent to €43.67. Deutsche Bank said: "These results were always going to be important, given the disappointing results from other telecom equipment companies. However, Nokia have beaten our expectations at every level. Importantly, margins in handsets were 19.6 per cent."

Last week Motorola fell almost 20 per cent after cutting its earnings estimates. Ericsson, the third of the three big mobile handset makers, reports today.

Jerry Raybould, European equities salesman at Credit Lyonnais, said he had studied the results from Nokia carefully "and I can't find a hole in the numbers".

The news helped put a floor under European telecom prices on a day when the Nasdaq opened with a 6 per cent rebound. Ericsson rose 9.4 per cent to 151 and telecom equipment maker Alcatel rose 7.6 per cent to 74.80.

The big telecom operators France Telecom, Deutsche Telekom, Telefonica were all up by 3 per cent or more. Telefonica topped the league with a 6 per cent rise to €21.25.

Olivetti, which controls Telecom Italia, edged up to 3.17 after its chairman Roberto Colaninno played down a press report that GE Capital plans to take a stake in Bell, the holding company that controls Olivetti.

Technology stocks surged too, with Siemens up 5.7 per cent to €138.25, Epcos up 5.5 per cent to €84.25 and Philips up 7.2 per cent to €44.50. Volatile chip makers bounced back even more strongly as the Philadelphia semiconductor index opened 12 per cent higher.