Easing US interest rate pressures pushed Frankfurt to a record high, with the Xetra DAX index closing 3.5 per cent or 227.65 higher at 7,200.08

It was a dramatic close to a volatile week. Over the five trading days, the benchmark has risen a full 6 per cent.

Deutsche Telekom, the market heavyweight, rose 4.9 per cent after the group announced plans to float its Internet and mobile phone offshoots. The stock jumped €3.30 to €71.30.

Mannesmann also came in for strong buying, gaining €15.10, or 6.3 per cent, to €257.15 after the group's takeover defence strategy offered strong growth prospects and a flotation for the group's Internet business.

Insurers rallied, with Allianz advancing €27.30 to €371.35 and Munich Re adding €24.50 at €308.50.

Paris pushed ahead strongly on a renewed surge for technology-related stocks, and by the close of trading the CAC-40 index was up 154.2 at 5,787.44 in bumper volumes.

Investors continued to warm to Lagardere's purchase of a big stake in pay-TV group Canal Plus' satellite offshoot. The shares rose a further €3.50 to €71 for a two-day gain of more than 11 per cent.

Market heavyweight France Telecom gained €6.40, or 5.5 per cent, to €121.9. STMicroelectronics added €10.50 at €153.50 and Cap Gemini rose €8.80 to €251.

Amsterdam rose a further €13.39 to €655.60 on the AEX index, for a two-day gain of 2.5 per cent.

Techs were among the firmer features, with Philips jumping 5.4 per cent or €7.85 to €152.10. ASM Lithography rose €12.60, or 11.8 per cent, to €119.25. Baan was the odd man out, sliding 84 cents, or 10.8 per cent, to €6.96.

Financials rallied on the improved interest rate outlook in the US. ING gained €1.32 to €57 and ABN Amro added 37 cents at €22.62, although trading volumes were moderate at best.

Madrid continued to be dominated by demand for technology shares and telecoms issues as investors registered approval for Telefonica's wholesale reorganisation of its businesses. The general index finished 24.63, or 2.5 per cent, higher at 995.43.

Milan was cheered by a strong start in the high-technology sector in the US and the Mibtel index finished 730, or 2.6 per cent, higher at 28,441.