European technology and technology-related shares put in a sparkling performance as the Nasdaq opened more than 5 per cent higher.
The gains were helped by investor relief that Marconi had not added a profit warning to its widely expected job cuts announcement. Job losses at Siemens were also favourably received by the market.
Niall MacLeod at Schroder Salomon Smith Barney said the news flow had also improved. For instance, the European Investment Bank's possible involvement in 3G mobile financing, announced on Monday, helped sentiment in telecom stocks.
But he added that the enormous growth of short selling activity in the past 18 months regularly exacerbated share price movements.
Dutch cable company UPC rose 8.4 per cent to €5.70, Ericsson was up 8.7 per cent to SKr62.50, Alcatel rose 8.5 per cent to €34.45 and Nokia gained 6.9 per cent to €28.64. Nokia announced it had won a deal to be the sole provider of a third generation mobile network for Orange Switzerland.
Siemens rose almost 4 per cent to €118.90 after it said it would shed a quarter of the jobs at its three German mobile handset plants in response to slowing growth. Siemens is number four in handset manufacture globally, behind Nokia, Motorola and Ericsson.
KPN was up 9.5 per cent at €12.30, Bouygues rose 6.8 per cent to €42.65, France Telecom was up 5.8 per cent to €76.40 and Deutsche Telekom rose 8.1 per cent to €29.01. While Deutsche Telekom is still below the €32 that was factored into its take-over deal for Voice-Stream, it looks like a stock that has stopped falling, having bobbed about in the €26-€30 range for the past two months.
Swisscom posted a sharp drop in operating profits for 2000 and warned they would fall further this year. The liberalisation of the Swiss market has led to loss of market share and price reductions of up to 70 per cent in some services.
Swisscom, in which the Swiss government still has a 65.5 per cent stake, said EBIT operating income fell more than 25 per cent to SFr1.8bn. The shares closed 0.6 per cent lower at SFr410.50.