Europe's wounded stock markets kept up their recovery from five-and-a-half-year lows yesterday as Wall Street opened up and as US firms reassured, after Germany's Ifo indicator offered some economic cheer.
Many of the stocks bashed in recent weeks - banks like ABN Amro and Barclays and insurers like Axa - led the bounce, along with techs, after Dutch chip gear maker ASML Holding reiterated its shipments outlook.
Strategists, though, were loath to call a bottom after seeing the market slide in eight of the last nine sessions, because of the still uncertain outlook for economic growth and profits, and the heightened prospect of a war with Iraq.
"It's not the end - investors will only stop panicking when the policymakers start panicking," said Michael Hartnett, European equities strategist at Merrill Lynch.
In that respect, US central bank chief Alan Greenspan gave investors no new clues as he delivered the first of three speeches in London after the Federal Reserve stood pat on rates on Tuesday.
By 1332 GMT, the FTSE Eurotop 300 index jumped 3.0 per cent to 832 points, after closing on Tuesday at its weakest level since April 1997.
Trading volumes were heavy and gains were broad-based, with advancing issues outpaced decliners by a margin of five-to-one.
The narrower DJ Euro Stoxx 50 index rose 3.8 per cent to 2,269 points.
In New York, the Dow Jones industrial average rose 1.5 per cent in early trade, boosted by diversified conglomerate General Electric after the company said its third quarter earnings remained on track.
The tech-laden Nasdaq Composite also jumped 1.5 per cent, encouraged by RF Micro Devices, after the mobile phone chip supplier upped its sales and earnings targets.
After an iffy start, shares in Europe were boosted after September's Ifo business sentiment indicator fell to 88.2. Although that was the fourth monthly drop in a row and in line with expectations, traders said they were relieved the data had not been worse.
"Together, this indicates that the economic situation is not as weak in the third quarter as everyone is saying," Heinrich Engelke of Bankgesellschaft in Berlin said.
Adding to the Ifo glow, Italian business confidence in September posted its first monthly rise since May.
ABN AMRO and Barclays recovered some of the ground lost in recent days, adding 7.1 per cent and 8.4 per cent respectively as investors moved in to pick up stocks hit in recent days by fears of mounting bad debt due to a deteriorating economic outlook.
Germany's third-biggest insurer, Italian-owned AMB Generali , France's AXA and Dutch group Aegon led a fightback among insurers.
Meanwhile, shares in ASML jumped 12.9 per cent, reversing all of the 9.39 per cent loss seen on Tuesday in heavy volume, after the company repeated that it expects to ship about 100 lithography units in the second half of 2002.
ASML also reiterated that it would ship at least 60 units in first-half of 2003.
Chip makers like Infineon Technologies and STMicroelectronics, along with British designer ARM, were boosted by the RF Micro Devices news and the Nasdaq's firm start.
Elsewhere, AstraZeneca rose 5.1 per cent after Europe's second-biggest drug maker won an advisory panel's support for US approval of the drug Iressa, a pill that may become the first of a new type of cancer medicines to reach the US market.
Morgan Stanley and ABN AMRO upgraded their ratings on the stock due to the Iressa news.
Investors also applauded company moves to cut onerous debt levels.
Shares in French telecom equipment maker Alcatel surged 11.9 per cent after announcing the sale of a 6.8 per cent stake in French defence electronics firm Thales as Alcatel looks to cut its debt pile.
Thales shares fell 7.3 per cent to 30.5 euros. Sources close to the deal said the stake sale would be pitched at 31 euros.
Another debt-laden company, French media giant Vivendi Universal, said its Canal Plus pay-television unit had sold its technology unit to Thomson Multimedia for 190 million euros in cash.