Frankfurt DAX: German shares closed trade with hefty gains and well above a key technical and psychological level after US data released earlier soothed fears of an interest rate hike there. The DAX-30 index closed at 5107.44, down 1.04 points, or 0.02 per cent. But in later screen-based trade the Xetra DAX index ended at 5241.23, up 157.43 points, or 3.10 per cent.

Mannesmann soared after a senior company executive said it aims to double its telecommunications business over the next three years. The market was also boosted by strong results from Bertlesmann, where sales rose over 2 per cent to 11.7 billion marks in the half to December.

Paris CAC-40: French shares closed nearly 4 percent higher, tagging along with a big Wall Street rise after solid first quarter US GDP growth showed no signs of inflation and dispelled lingering rate rise fears, traders said. The CAC-40 index closed at 3880.92, up 146.99 points, or 3.94 per cent.

Volume was heavy ahead of the May 1st long weekend, with 16.6 billion francs' worth of shares exchanged on the monthly settlement market, with the volumes also boosted by the expiry of April options and futures and some position-squaring ahead of the long weekend. The Bourse was also encouraged by a 1.2 per cent drop in French unemployment in March.

Milan Mibtel: Italian shares closed sharply up, near the day's highs, as European and US markets were lifted by the US data showing the economy was growing with little threat of inflation, easing fears of a rate increase. The All Share Mibtel index closed at 23053, up 810 points, or 3.64 per cent.

Banca Fideuram, Edison, Benetton and Sasib were the biggest gainers, each rising by over 7 per cent while the biggest volumes were in Banca di Roma, Finmeccanica and Olivetti.