Paris continued its record-breaking run as the telecoms sector emerged further from its recent weakness. The CAC-40 index hit a second consecutive all-time closing high, adding 1.6 per cent to 6,922.33, its 12th record close this year.
However, volume was a moderate 41.5 million shares compared with almost 55 million on Friday, reflecting that the US markets were closed for Labor Day.
Telecoms stocks were very much the focus. France Telecom rose 6.9 per cent to €151.40 following its 10.2 per cent rise on Friday. Its firsthalf results are due tomorrow.
Equant, the ever-volatile network services group, jumped 10 per cent to €49.60 after lagging behind the market in recent weeks. Telecoms equipment maker Alcatel rose 3.5 per cent to €97.05 on bright prospects for orders to develop Internet and third generation mobile phones.
Air France rose 1.8 per cent to €21.60 after reporting a surge in first-quarter profits which fulfilled expectations.
Frankfurt continued to gain ground with another strong run for Deutsche Telekom sending the bench-mark indices higher for the third day running. Deutsche Telekom rose €2.72 to €48.92 in 8.6 million shares traded to extend its gains to around 12 per cent in two days as investors continued to seek out telecoms blue chips.
Helped by news of a Spanish acquisition, T-Online, the Internet service provider controlled by Telekom, rose €1.20 to €32.95. Siemens rose €3.74 to €189.24 and SAP €8.74 at €307.50.
Blessed with good timing, optical technology group Linos made a dramatic debut in the Neuer Markt, punching up to €72 against a flotation price of €27.
BMW added 42 cents at €36.71 and leisure group Preussag €1.18 at €38.80. Lufthansa fell 93 cents to €23.89.
Banks were mixed. Commerzbank again fell heavily as investors fretted about the group's plans for share issues as it cements links with strategic partners. The shares lost €1.10 to €34.10 for a two-day setback of 7 per cent. Deutsche Bank fell 42 cents at €97.98. The Xetra DAX index was up 74.55 at 7,419.22 at 5.30 p.m. German time.
Amsterdam rose to an all-time high with the AEX index adding 6.38 at 701.56 on the strength of TMT stocks. Cable TV group UPC continued to race upwards, gaining €2.60 or 8.6 per cent to €32.80. Supported by positive broker comment, the shares have risen more than 30 per cent in three days.
ASM Lithography rose €2 to €47.50 and telecoms leader KPN, which last week hit a low of €27.81, gained €1.27 to €32.45 in 11.5 million shares traded. Philips put on 75 cents at €57.25.
Acquisition news and an upbeat trading statement got behind TNT Post which rose 77 cents to €27.21.
Milan saw momentum begin to flag around mid-session as weakness emerged in the financial sector. Even so, the Mibtel index finished with a gain of 234 at 33,446.
Financials came under the spotlight after Generali's deal to raise its stake in Commerzbank and the possibility that UniCredito was still interested in bidding for Bank Austria if its merger plan with Germany's HypoVereinsbank ran into trouble. Generali dipped 1 per cent to €34.35 and UniCredito eased 0.2 per cent to €5.85.
Among banks, BNL lost 3.7 per cent to €4 after a report that linked it with Banca di Roma. Roma lost 2.1 per cent to €1.35.
Among telecoms, Telecom Italia Mobile, due to report half-year figures after the market closed, gained 2.3 per cent to €100.40. The heavily traded Olivetti climbed 1.5 per cent to €3.70, Telecom Italia was 3.1 per cent ahead at €14.68 and Tecnost rose 1.9 per cent at €4.05. Seat, Telecom Italia's internet partner, jumped 3.6 per cent to €3.73.
Madrid rose as market heavyweight Telefonica gained from the positive sentiment for telecoms stocks in spite of a rating cut by Fitch IBCA. Telefonica added 5.1 per cent to €24.39 and the Ibex 35 index closed 0.7 per cent higher at 11,246.3.
