European stock markets took encouragement from an early rise on Wall Street, although the Dow Jones Industrial Average had moved into negative territory by mid session.
The Eurobloc 100 index of leading shares in the euro zone put on 15.37 or 1.5 per cent to reach 1,046.46 while the Eurotop 100 went up 60.17 or 2.1 per cent to 2,921.63. The more broadly-based Eurotop 300 index closed 24.43 or 2 per cent higher at 1,273.8.
Frankfurt pared some of Thursday's 3.4 per cent loss, lifted by rumours of a merger between Viag, the utility, and Veba, the industrial group. The Xetra Dax index rose 49.55 or 1 per cent to 5,101.87.
Viag was the best performer on the Dax, rising €43 or 10 per cent to €474.90 after a newspaper reported it and Veba were seeking regulatory approval for a merger plan. Veba gained €2.13 or 3.9 per cent to reach €57. DaimlerChrysler, the carmaker, was the most traded stock, with many analysts downgrading it after the release of worse-than-expected first-half results on Thursday.
The company, which tumbled 7.5 per cent on Thursday, fell another €2.80 or 3.8 per cent to €71.20. BMW prospered at its rival's expense, climbing €35 or 5 per cent to €737.
Paris recouped much of Thursday's decline as investors bought heavily ahead of the expiry of the futures and options contract yesterday.
Renault, the carmaker, made the biggest gain on the CAC, closing €4.09 or 8.9 per cent ahead at a year high of €50.20. Alcatel, the telecoms company, climbed €4.80 or 3.5 per cent to €143.80 on news of a strong rise in second-quarter sales. Morgan Stanley Dean Witter upgraded the stock from "neutral" to "strong buy".
TotalFina and Elf Aquitaine, the oil groups, both benefited from the climb in the crude price. Total rose €3.80 or 3.3 per cent to €119, while Elf closed €5 or 3.2 per cent up at €160.
Amsterdam followed other European markets higher, lifted by a sharp climb by Royal Dutch Petroleum, the oil group.
The AEX index finished up 6.7 or 1.2 per cent at 552.77. Royal Dutch closed up €2.85 or 5.1 per cent at €58.40, lifted by the rising oil price.
KLM, the airline, ended 65 cents or 2.7 per cent higher at €24.80 after it revealed details of a co-operation agreement with Alitalia. The two companies said they would continue the study of financial, organisational and legal integration.
Benckiser, the household cleaning products group, dropped €1.30 or 2.2 per cent to €58.75 after several days of gains this week on news of its merger with Reckitt & Colman of Britain. The stock has climbed 11.8 per cent this week.
