Shares in Paris closed at a record high shrugging aside the resignation of Mr Dominique Strauss-Kahn, the French Finance Minister. The CAC-40 benchmark index nudged up 9.9 to 4,898.52 in volume of 2.9 billion.
The blue-chip index had dipped more than 1 per cent lower in the immediate aftermath of the resignation but quickly recovered its poise following a strong start to trading on Wall Street. Wall Street's early strength gave a lift to many European markets. The FTSE Eurobloc 100 index rose 1.26 to 1,123.62. The FTSE Eurotop 300 index fell 0.66 to 1,343.14.
Shares in STMicroelectronics were catapulted higher after an analysts' meeting in which the company painted a rosy picture of the semiconductor market. Analysts said the company increased its forecast for overall growth in the semiconductor market from 22 to 25 per cent. Goldman Sachs raised its share price target for the stock to $125 from $85. This heady combination sent shares in the company up €9.20 to €92.70, a rise of more than 11 per cent.
Milan celebrated the flotation of electricity utility Enel with a claim that the bourse had pushed aside Amsterdam to become Europe's fifth largest share market by capitalisation. The debut of Italy's former electricity monopoly boosted Milan's market capitalisation by €52 billion, or about 10 per cent.
Shares in Enel, now the world's largest listed electricity company made a steady debut. They opened at €4.40 but by mid-session they were hovering around the sale price of €4.30 fixed for the 30 per cent sell-off at the weekend. They closed at €4.31. The broad market was weak, reflected in a 121 fall in the Mibtel index to 23,194.
Frankfurt edged ahead late in the session, taking its lead from US markets, but Volkswagen tumbled 4.9 per cent after the motor group's nine-month figures failed to live up to expectations. The Xetra DAX index finished 22.03 higher at 5,546.95.
Volkswagen led the motor sector lower as the market gave a downbeat response to its nine-month pre-tax profits, released after the market closed on Monday. VW fell €2.73 to €53.51 and BMW gave up €1.09 to €29.72.
DaimlerChrysler lost €1.27 to €72.23.
Madrid pushed higher as expectations grew that the European Central Bank would put up interest rates. The blue-chip Ibex-35 index gained 106.4 to 9,847.9, with telecom group Telefonica up 31 cents at €15.95, a rise of almost 2 per cent. But shares in Sol Melia, the hotel company, plunged on concern that it may be penalised by the US government under the Helms-Burton law in a dispute over its hotels in Cuba. They fell 50 cents, or 4.6 per cent, to €10.35.
Amsterdam responded less favourably to the prospect of rising euro-zone interest rates, with shares falling in thin trading. The AEX blue chip index closed down 0.20 at 567.99.
