European stock markets extended their already ample gains yesterday afternoon, powering clear of four-year lows as Wall Street opened higher and fears over company guidance receded.
"We're starting to feel that a bottom's gradually forming," said Martin Brooker, European equity strategist at E*Trade Securities in London.
"The bears out there were preparing the market for very bad news in the earnings season and, while the market is still worried about forward-looking guidance, what we saw on that front yesterday was okay."
By 1347 GMT, the FTSE Eurotop 300 index of pan-European blue chips was 3.84 per cent higher while the narrower DJ Euro Stoxx 50 index gained 4.6 per cent.
That added some 160 billion euros to the value of Europe's leading 300 companies.
Technology and telecom shares led the upwards charge, the DJ Stoxx indices for the two sectors adding more than six per cent apiece.
Oil stocks rose on news of a surprise decline in US petroleum inventories while financials and insurers gained due to relief that their exposure to equity markets looks a little less precarious.
Shares in Deutsche Telekom jumped 12.2 per cent after its revamped supervisory board vowed a radical cost-cutting strategy following the departure of Chief Executive Ron Sommer.
Telecom equipment makers were the driving force behind the bounce in tech stocks, cheered by encouraging noises from Motorola, which topped analysts' expectations with its earnings on Tuesday night.
"You could argue that the bar was set very low for Motorola but, still, they jumped it," Brooker said.
"We're got more hurdles to get over this week, with results from Microsoft, IBM, Nokia and Ericsson, but we're in such an oversold state that they'd all have to disappoint to really hit the market hard."
IBM reports later on Wednesday, Microsoft and Nokia follow suit on Thursday and Ericsson wraps up a busy week for the technology sector with results tomorrow.
Nokia gained 6.9 per cent, Ericsson added eight per cent and France's Alcatel surged 11.8 per cent.
Europe was also helped by Wall Street's perky start. The Standard & Poor's 500 Index added 2.59 per cent in the first 15 minutes of trade and the tech-laden Nasdaq Composite climbed 3,43 per cent.
Insurers and financial stocks rose as the stock market rally took some of the pressure off their dwindling capital reserves.
Swiss financial giant Credit Suisse rose 9.8 per cent, Dutch ING added 8.1 per cent and compatriot Aegon added 8.5 per cent.
Among Europe's other standouts, shares in Norwegian-American video projector maker InFocus leapt 25 per cent after it reported better-than-expected results and said third-quarter revenues and earnings would be just as good.
On the downside, drug maker GlaxoSmithKline fell 0.7 per cent after three senior research and development scientists resigned, and Swiss food giant Nestle was weak after UBS Warburg downgraded it to "hold" from "buy".
Shares in Anglo-Dutch steelmaker Corus sank almost five per cent after it announced a $4.8 billion deal to buy Brazilian peer Compahnia Siderurgica Nacional.
Shares in CSN in Brazil jumped by 25 per cent. Despite the sunnier mood on most of Europe's bourses, some players remained wary after a couple of weeks in which stock prices have swung wildly and indices have plumbed some of their lowest levels in five years.
"This is a derivatives driven rally, the futures market just took off this morning and took the cash market with it. There must be a big global programme trade out there pushing prices," one pan-European equity trader said.
"But will this last?," he asked. "I don't think so. I'm looking to sell into this rally when I can."
U.S. Federal Reserve Chairman Alan Greenspan will deliver his semi-annual monetary policy testimony before the House Banking Committee, although his speech is not expected to be materially different from that on Tuesday.