What with bullish forecasts from Nokia and a storming start on the Nasdaq, Europe's telecom and technology stocks were in full rebound mode. Finland's mobile phone maker Nokia rose 9.7 per cent to €54.10 after it said its forecast of 25-35 per cent annual revenue growth a year would extend all the way to 2003, not just to the end of next year. Its predictions contrasted with statements earlier this autumn from Motorola and Ericsson that suggested slowdowns in growth of handset use.

Bruce McDonald at Deutsche Bank said Nokia had established itself as the brand of choice for replacement mobiles, which were going to be 70-80 per cent of the market in a couple of years. This "different demand dynamic" was distinguishing it from rivals.

Nokia's share price has held up well, compared with its peers, having rebounded more than 60 per cent from a low point on October 18. It is now 19 per cent below its peak this year, compared with other telecom operators and manufacturers which are typically 40-50 per cent down. Sonera, the Finnish mobile operator, is more than 75 per cent down.

With so many TMTs presenting disappointing news to the markets this autumn, Nokia's announcement stood out like a beacon. Its forecasts lifted a whole range of European stocks with interests in the industry. Ericsson rose 7 per cent to €127.50, Alcatel rose 10.4 per cent to €66.70, STMicroelectronics was up 10.2 per cent to €53.90 and Infineon was up 10.6 per cent to €49.42. Telecoms operators participated more modestly in the upturn. Deutsche Telekom rose 3.1 per cent to €37.11 towards the end of the session and France Telecom was up 4.6 per cent to €97.25. Telefonica was one of the hottest stocks, gaining 7.1 per cent to €19.30.

Financials featured sharp gains. Deutsche Bank rose on the view that the stock was cheap after Monday's 5 per cent tumble, prompted by plans to split the bank into two businesses - investment banking and retail asset management from February. The shares rebounded 5.5 per cent to €86.43, raising hopes that they could return to the 100 level where it last traded in August.

Other German blue-chip banks were higher, with Dresdner Bank up 5.4 per cent at €44.90, Commerzbank 1.4 per cent better at €29.41 and HypoVereinsbank 2.2 per cent stronger at €57.40. The upbeat performance reflected an easing of concerns that they could be hit by Turkey's banking crisis.