European equity markets raced towards a 10-day high yesterday, with technology shares leading the advance, as improving US labour data fuelled hopes the all-important US consumer will spend more and sustain an economy rebound.
By 1340 GMT, the FTSE Eurotop 300 was 2.2 per cent higher at 898 points, its highest intraday level since September 24, while the narrower DJ Euro Stoxx 50 index was up 2.7 per cent at 2,501.
SAP, the German software maker, was among the leading tech gainers after US rival Siebel said it was on track to meet analysts' profit forecasts, despite its quarterly revenues being hit by sluggish demand and aggressive discounting by competitors.
Insurers, whose equity portfolio inflate and shrink in tandem with stock markets, were another bright spot, with Germany's Allianz and French peer Axa up around four per cent each.
The markets raced higher after the US Labour Department said the number of workers on US payrolls outside the farm sector grew 57,000 last month, the first rise in eight months, in a surprise twist for financial markets that had been braced for more losses.
The pick-up in September employment, which kept the unemployment rate stable at 6.1 per cent, was welcomed by investors after a recent run of patchy data fuelled concern that this summer's signs of economic recovery may be difficult to sustain.
"The data soothes fears that the lack of pick-up in the labour market could kill off the economic recovery and relaunch the scenario of slow recovery that accelerates little by little," said Chloe Magnier, economist at CIC Securities in Paris.
"We need to get a confirmation of today's figures in the next two to three months and most of all, we need to see some turnaround in the manufacturing sector, where jobs are still so far being destroyed."
Across Europe, Frankfurt's DAX index led the march up with gains of 3.4 per cent while London's FTSE 100 added 1.4 per cent and the CAC 40 rose 2.7 per cent.
Broker upgrades buoyed a number of technology issues amid more signs that the sector was slowly getting out of the woods after three years of downturn.
Nokia gained 4.3 per cent as Nomura raised the Finnish telecom equipment maker to "buy" from "neutral" on expectations of more positive guidance.
Dutch consumer electronics maker Philips was upgraded to "add" from "hold" by ABN AMRO, sending its shares 4.2 per cent higher.
Dutch semiconductor maker ASML also jumped 10 per cent after investment bank Merrill Lynch upgraded the stock to a "buy".
Economy-sensitive media shares also lent support, with French commercial television broadcaster TF1 up nearly six per cent after Standard & Poor's affirmed its credit ratings.
The news helped the stock recover after an 18-per cent plunge in September.
French-American media giant Vivendi Universal was another standout, up five per cent as industry sources said a deal on the merger of its US entertainment arm with General Electric-owned television network NBC may be announced as soon as next week.