Paris rallied on a renewed wave of corporate activity stories to send the CAC-40 index back up to record levels with a gain of 68.10 to 5,246.33.

STMicroelectronics was the top performer, advancing €9.50 or 9.1 per cent to €114.50. Lagardere continued to forge ahead amid persistent rumours that the group was negotiating the purchase of a stake in CanalSatellite, an offshoot of pay TV leader Canal Plus. Lagardere added €1.11 at €41.10. Hints from France Telecom that further deals and alliances in Europe were just around the corner sent the telecoms giant up €5.80 at €105.60.

Speculation of a formal offer for Mannesmann from Vodafone AirTouch reached fresh heights after Goldman Sachs was given court clearance to act for the British group. At the end of another active and volatile session - which took in all sorts of stories about possible counter-offers, notably from a consortium led by Siemens - Mannesmann was €10.80 higher at €207.50.

Siemens, which eventually denied that it was linking up with the newly combined Veba-Viag alliance to outbid any offer from Vodafone, rose €2.04 at €98.60. Stockholm pressed further into record territory, supported by another bullish performance for telecoms group Ericsson after Merrill Lynch upgraded the target price for the stock. The general index closed 83.86 higher at 4,628.83. Ericsson climbed 26.50 Swedish krone to SKr416.50 (€48.34).

Helsinki climbed to another all-time high, still driven by bourse engine Nokia's bull run which has taken the share up by more than 50 per cent over the last four weeks. The general index put on 514.11 or 5 per cent to 10,719.89. Nokia added €8.10 or 6.6 per cent to a record €131.70.

In Amsterdam, there was strong demand for chemicals leaders and Royal Dutch. The AEX index ended 4.10 higher at 607.63. Strong oil prices continued to underpin Royal Dutch which ended €1.62 better at €63.55.