Frankfurt DAX: 2329.22 (+44.36)

Germany's blue chip index sprinted to a record closing high, driven by a surge in DAX futures and supported by heavy gains on Wall Street. While volumes remained moderate, dealers reported some interest from US, British and French funds mopping up excess liquidity from end of year bond sales.

Paris CAC-40: 1942.96 (+34.58)

French shares ended their second session of the year with another major advance as professionals pushed the index higher. Traders said speculators were hopeful that the strength of the French franc against a weak German mark could pave the way for further interest rate cuts, boosting the economy.

Milan Mibtel: 9553 (+23)

Italian shares closed slightly higher but took a knock in late trading after hard right leader Mr Gianfranco Fini said the centre right Freedom Alliance would seek the removal of Prime Minister Mr Lamberto Dini next week.