European blue-chips ended near fresh 16-month highs yesterday, boosted by techs and telecoms after Nokia raised its sales and profit forecast for the fourth quarter.

Strategists said news from telecoms and computer chip companies was helping ease some concerns investors still had about the strength of the global economy.

"Telecoms companies are giving out strong buy signals," said Achim Matzke, head of European Index Research at Commerzbank. "There's a lot of liquidity... A lot of money is flowing into the European equity market."

The FTSE Eurotop 300 index of pan-European blue chips closed up 0.94 per cent at 976.49 points, off an earlier fresh 16-month high of 982.05. Gainers led losers in a ratio of around two to one in heavy volume.

The narrower DJ Euro Stoxx 50 index rose 1.31 per cent to 2,818.87 points.

Nokia, the world's largest mobile phone maker, surged 12.4 per cent and took with it Swedish telecoms equipment maker Ericsson, up 13.8 per cent.

French blue-chip Alcatel climbed 10.4 per cent as news that Nortel had struck a deal with telecoms giant Verizon raised hopes that cellphone companies were ready to start capital investment.

"(The deal) is in stark contrast to the pattern of the last two years where spending has been focused on squeezing the most traffic from the existing assets and projects to meet immediate demand," said Nomura analyst Richard Windsor.