European stock markets reacted enthusiastically to the unexpected surge on Wall Street, with technology stocks in particular notching up big gains as investors took the view that the worst may be over for the beleaguered technology sector.
The major European markets rose by between 2 and 4 per cent, as investors moved back into equities. Specialist technology markets made big gains, with London's techMARK index up more than 6 per cent, while the Neuer Markt's Nemax All Share Index was up almost 5 per cent in response to the early gains on Nasdaq.
The Irish market rose by almost 2 per cent, while Irish technology stocks on Nasdaq made spectacular gains - albeit from very low levels.
But some market analysts sounded a note of caution, saying the FTSE had got ahead of itself.
"Another bubble is being created, and with every bubble stock market investors need to enjoy the ride but stand close to the exit door," said Mr Jeremy Batstone, head of research at NatWest Stockbrokers.
The blue-chip Dow Jones Euro Stoxx 50 index was 3.43 per cent higher at 3,817 points - a sliver away from its intraday highs, which represented a new post-September 11th record. The broader FTSE Eurotop 300 index of pan-European blue chips was 2.43 per cent higher, just eight points off its post-September 11th high.
Chartist Nicola Merrell of JP Morgan saw further upside for European shares as a result of the moves on Wall Street.
But European markets had already been in a positive frame of mind before New York opened, buoyed by yet another strong performance from the tech sector. The Dow Jones Stoxx technology index climbed 7.83 per cent. The index has soared 74 per cent since it rebounded off long-term lows on September 21st, while the market as a whole has risen by 25 per cent.
However, not everything went the way of the bulls. The euro-zone business climate index fell to its lowest in nearly five and a half years in November, according to the European Commission, but, again, the decline was less than forecast.
The data increases pressure on the European Central Bank to cut rates when it meets today.
--(Additional reporting Reuters)
