European stock markets toyed with their highest levels in more than two-and-a-half months on Thursday, as investors snapped up media stocks such as Granada amid signs of a pickup in advertising.
France Telecom was another strong performer as investors welcomed news of job cuts as evidence that the company is slashing costs, just as hopes grow that the French government will tackle the group's huge debts.
Dealings were slightly below average, with Wall Street shut for Thanksgiving Day.
But the overall tone was steady as rising stocks outpaced fallers by two-to-one, and markets showed few side-effects following news of a bomb and missile attack against civilian and Israeli targets in Kenya.
"People are buying as they are underweight in shares," said Peter Luedke, a dealer at Merck Finck, a private bank in Munich.
By 1649 GMT, with only Frankfurt officially trading, the FTSE Eurotop 300 index was up 0.56 per cent at 942 points, while the DJ Euro Stoxx 50 was up 0.54 per cent at 2,669 points.
For the second time in a week, the Eurotop 300 peaked at 947.38 - its highest intraday point since September 12.
Having recovered by around a fifth since plumbing five-and-half-year lows in early October, bullish investors are hoping the index can extend its gains next week, partly thanks to an expected interest rate cut by the European Central Bank.
The ECB is seen cutting euro zone interest rates by half a per centage point on December 5, according to a Reuters poll of economists on Wednesday.
The longer-term outlook for shares, though, remains unclear. Technical analysts at Credit Lyonnais believe US markets can stretch their recovery from October's trough to 50 per cent over coming months. That bodes well for European markets, which are strongly correlated to Wall Street.
But over the long-term, Credit Lyonnais' global strategist Christopher Wood remains convinced that world markets will hit new lows, as company profits struggle to take off.
He cited the historical case of deflation-laden Japan, where the Nikkei average remains near 19-year lows, even though shares have rallied by more than 50 per cent on three separate occasions in the last decade - in 1992-1993, 1995-1996, and 1998-2000.
A clutch of UK media companies reported this week that the advertising market was maintaining a fragile recovery, though they would not be drawn into giving a prediction for 2003.
Daily Mail & General Trust, owner of UK newspapers the Daily Mail and the Evening Standard, said it was having an encouraging first quarter. But it also said it was hard to predict performance beyond Christmas.
Daily Mail shares tacked on 3.3 per cent. Broadcasters Carlton and Granada, and advertisers Havas, WPP Group, Aegis and Publicis were all around five to nine per cent higher.
Meanwhile, shares in France Telecom leapt for the second day, surging by 12.6 per cent after the debt-laden group confirmed it expected to shed 20,000 jobs over the next three years as it takes steps to improve its balance sheet.
Elsewhere, Germany's Munich Re dropped 3.4 per cent after the world's No.1 reinsurer posted a third quarter net loss of 859 million euros, though in line with expectations.
"The numbers were not sparkling and it seems to me we had some profit-taking," Luedke said, citing recent gains in the stock.
Other insurers like Britain's Prudential and France's Axa added more than three per cent each.
The retail sector was weighed down by a sharp drop in Dixons Group, Britain's biggest electronics retailer, which said a new tax measure will cut profits from its lucrative extended warranties.
Dixons shares fell 9.3 per cent. Kingfisher, which operates rival electronics retailer Comet, sank 3.1 per cent.
Shares in French speciality chemical maker Rhodia surged 13.7 per cent after shareholder Aventis signalled it may eventually sell its 25 per cent stake, rekindling speculation over Rhodia's future.
Europe's largest tourism firm TUI AG posted a rise in core profits that beat market expectations and said bookings were picking up despite the economic climate and security fears, boosting its shares by 3.98 per cent.
Trading volumes could be further undermined today as many US dealers take advantage of the Thanksgiving Holiday to enjoy a long weekend.