Shares in Frankfurt overcame early wobbles to close 109 points above their low for the session thanks to a strong run for Deutsche Telekom. The Xetra DAX index ended up 83.38 at 7,727.93.
Deutsche Telekom was the focus of renewed deal speculation, rising €5.89 or 6.8 per cent to €91.99 on talk that the group was poised to either bid for or link up with Telefonica, Spain's telecoms giant.
An Italian press report that it was set to bid for Fiat put Daimler-Chrysler into a spin. The shares tumbled to €66.76 before closing with a decline of €1.80, or 2.6 per cent, at €68.20.
MAN rose €1.18 to €34.80 after an upgrade to outperform at Lehman Brothers. Chemicals, a firm market lately on sector rotation, ran into profit-taking. Bayer shed €1.09 at €42.70 and BASF €1.70 at €46.20.
Paris was boosted by telecoms and media stocks, but some "old economy" stocks sagged, leaving the CAC-40 index just over 1 per cent higher. It gained 65.36 to 6,256.32.
Some good corporate results helped, with gainers leading decliners 22 to 17. France Telecom rose €7 to €174.5 amid positive sentiment ahead of its 1999 results, released after the market closed. They showed profits up 20 per cent, far exceeding market expectations.
Credit Lyonnais surged late in the session, climbing €2.70 to €37.90. Its results are due on March 7th. Bouygues Telecom also staged a late rally on news of a technical partnership with Ericsson of Sweden for third generation mobile phones. It gained €47 to €912.
Amsterdam continued to push higher with the AEX index adding 4.36 at 668.64 after Philips shot ahead on broker optimism. Lehman Brother lifted its earnings forecasts for this year and next and stepped up its target price to €220. The shares jumped €14.60 or 7.6 per cent to €206.85.
Milan maintained its record-setting run, with the Mibtel index chalking up a gain of 185 to 34,015. Banks remained under the spotlight. BNL reversed an early gain to close 1.7 per cent lower at €3.65 on profit-taking after Tuesday's 10.5 per cent surge.
Madrid closed lower, taking its lead from Wall Street, with the Ibex 35 shedding 47.1 to 12,548.7.
