Frankfurt DAX: 2496.17 (+27.39)

German shares closed over 1 per cent higher, but off the earlier highs, boosted by the strong dollar and the firm close on Wall Street on Friday night.

The market drifted slightly in after hours trading, with dealers cautious ahead of the US inflation figures and some significant corporate news due for release today. Dealers were sceptical, however, about the Dax's ability to break the 2500 level.

Paris CAC-40: 2100.85 (-13.95)

French shares finished lower after the strong gains of last Friday, but the market managed to hold firm above the 2100 level. The market drifted after the Bank of France left its interest rates unchanged at the weekly tender. The futures market was also lower, indicating a view that further weakness is in the offing.

Milan Mibtel: 10570 (+27)

Italian shares ended higher leg by the firmer trend in domestic bonds, the stronger lira and the continued strength on Wall Street.