European shares ended broadly stronger yesterday, hoisted higher by financials such as Anglo-US fund giant Amvescap.
The move was buttressed by strong technology and telecoms stocks, led by Swedish telecoms equipment maker Ericsson, as the sectors drew strength from fresh gains on Nasdaq.
Broader sentiment was bolstered by the continuing stream of third-quarter earnings, which strategists said have generally been positive, although they said that until a picture of improving economic fundamentals emerged, further gains would be limited.
"What is comforting is that we have seen some better news on the earnings front recently," said Ian Harnett, European strategist at UBS Warburg.
"But until we see some more decisive economic data combined with the removal of some of the risk factors that have been overhanging the market, like Iraq, then it will be difficult for the markets to push ahead, even though they are undoubtedly cheap in terms of fundamentals," Harnett added.
By 1555 GMT, with only Frankfurt still trading, the FTSE Eurotop 300 index was up 2.6 per cent at 897 points, snapping a two-day losing streak, while the narrower DJ Euro Stoxx 50 index was up 2.9 per cent at 2,468 points.
The benchmark FTSE Eurotop 300 has risen about 13 per cent since hitting a five-and-a-half year low on October 10.
On Wall Street, the Dow Jones industrial average was up 0.1 per cent, while the tech-heavy Nasdaq Composite index added 0.4 per cent.
Lower-than-expected new US jobless claims helped support the indices as it offered investors hope that the American labour market was strengthening and would boost consumer spending. Amvescap was Europe's top blue-chip gainer, surging 16.2 per cent and hauling the sector 2.9 per cent higher after reporting a smaller-than-expected drop in third quarter profits and announcing 100 million pounds in cost cuts.
Traders said banking and insurance shares were also retracing some of Wednesday's losses when the sectors were hit by worries about their exposure to troubled firms like Swiss engineering group ABB.
"Some of the financials have bounced back from yesterday when HVB also had some bad numbers out," said Michael O'Sullivan, European strategist at Commerzbank.
Shares in ABB, Europe's biggest industrial engineering firm, recovered some composure yesterday after the company said it would chop more costs, sacrifice a key division and axe jobs to restore profits and reduce debt.
The shares finished up 11 per cent, although they have fallen 97 per cent from their February 2000 high.
Meanwhile, oil stocks vaulted higher on the back of a rise in crude prices as the United States showed impatience with efforts at the United Nations to find a compromise resolution to force Iraq to allow weapons inspectors back into the country.
BP, Europe's biggest company, rose 3.3 per cent as TotalFinaElf added 3.8 per cent and Royal Dutch Shell rose 2.3 per cent.
Technology stocks drew strength from fresh gains on Nasdaq, with Ericsson surging 12.4 per cent as its competitors Lucent and Nortel rallied.
Elsewhere in the sector, Dutch chip equipment maker ASML rose 12.4 per cent, telecoms equipment maker Alcatel rallied 7.7 per cent and German chip maker Infineon jumped 9.4 per cent.
Among telecoms, France Telecom rose 7.6 per cent amid continued speculation about its coming financial restructuring.
"Some of the telecoms stocks are also doing well on the back of presentations of new phones and new services," Commerzbank's O'Sullivan said.
Britain's Vodafone rose 7.6 per cent after saying French media firm Vivendi Universal could not do an off-balance sheet deal to secure control of French telecoms operator Cegetel, blocking Vodafone's bid, under its shareholder agreement.