Europe's top shares climbed higher yesterday, reversing earlier losses after better-than-expected US weekly jobs data raised confidence in the strength of the economic recovery.
Technology stocks such as Dutch chip-equipment maker ASML and Philips led the gainers after bullish results from US industry leaders Cisco Systems and Qualcomm.
Chip stocks were also boosted after a trade group said global semiconductor sales are set to rise by nearly 16 per cent this year, up from its earlier forecast of around 10 per cent.
US jobless claims fell to 348,000 for the week ending November 1, beating expectations of a fall to 380,000.
"What we really wanted in order for people to be convinced that the recovery is real and sustainable was to see the labour market improving and this is the first concrete sign of that," said Darren Williams, an economist at Citigroup.
"Hopefully we'll get a little more tomorrow with a decent payrolls report."
In addition, US productivity gained strongly in the third quarter at 8.1 per cent, the largest rise in productivity since the first quarter of 2001, although slightly lower than forecast.
By 1400 GMT, the FTSE Eurotop 300 index of pan-European blue chips was up 0.9 per cent at 935 points, four per cent below Tuesday's 2003 high of 940.
The narrower DJ Euro Stoxx 50 index was up 1.1 per cent at 2,639 points.
The Bank of England raised British interest rates by a quarter point yesterday, its first hike in nearly four years, but this was a move that money markets had already priced in.
The European Central Bank, at its first meeting under new president Jean-Claude Trichet, kept interest rates steady as expected.
Markets were also awaiting a speech by US Federal Reserve Board chairman Alan Greenspan on the economy at 1500 GMT, as investors focus on any hints of interest rate policy.
Consumer electronics and semiconductor firm Philips jumped 3.6 per cent, while ASML rose five per cent following Cisco and Qualcomm's results after the bell on Wednesday.
"Both Cisco and Qualcomm issued reports that were quite optimistic, and that is boosting the whole technology sector," a trader at a Dutch brokerage said.