European blue-chips stood broadly firmer yesterday afternoon as better-than-expected economic data fuelled a second day of gains on Wall Street and extended the market's bounce from five-and-a-half-year lows.
Allied Irish Bank was Europe's leading gainer, rising 13.2 per cent after announcing it had agreed to merge its US unit Allfirst with M&T Bank Group for $886 million in cash plus a 22.5 per cent stake in the enlarged group.
By 1340 GMT, the FTSE Eurotop 300 index was up 3.4 per cent at 849 points as the narrower DJ Euro Stoxx 50 index rose 4.4 per cent to 2,337 points.
The Dow Jones industrial average rose 56 points in the first few minutes of trade.
US Labour Department data showed weekly jobless claims fell to 406,000 in the week ended September 21 against expectations of 421,000, while the Commerce Department said durable goods orders fell 0.6 per cent in August compared with forecasts for a 2.6 per cent fall.
"Given recent rises, the latest jobless claims data would suggest that while the labour market is not getting better it's not getting worse," said Matthew Wickens, global economist at ABN Amro.
"So it looks more like a jobless recovery than a double-dip," he added.
Tech stocks were in buoyant mood after Nokia, the world's biggest handset maker, said it expected industry-wide mobile phone shipments to grow 10 to 15 per cent in 2003 and each year after that. The stock jumped 7.6 per cent.
Dutch chip equipment maker ASML extended its sharp rebound from a year-low on Tuesday by jumping 11.4 per cent.
Elsewhere, insurers were heartened by a US ruling that three insurers, including beleaguered Royal & Sun Alliance, need pay only one claim for the destruction of the World Trade Centre.
Royal & Sun added seven per cent, Swiss Re jumped 8.1 per cent and Italy's Generali rose 5.1 per cent.
Germany's Allianz bucked the trend, shedding 3.5 per cent after Merrill Lynch downgraded the stock and as investors were disappointed with a newly announced restructuring.
European car makers were buoyed by positive news from the Paris motor show.
Among them, luxury German car maker BMW jumped 5.1 per cent after it said it expected BMW brand sales to rise five per cent in the first nine months of 2002.
Rival DaimlerChrysler AG accelerated 3.3 per cent after it pledged to continue cutting costs and hinted that it might exceed its operating profit target next year.