Markets were subdued on the last trading day of the year, showing modest gains and little inclination to cheer the better economic signals from the US.

Some of the blue-chip technology stocks continued to push ahead. Nokia closed 1.7 per cent higher at €28.74 while Ericsson was up 1.8 per cent at SKr57 and Alcatel rose 2.2 per cent to €19.20. Nokia has doubled its value in the past four months, having closed at €14.35 on September 7th. Ericsson, by contrast, has gained only about 50 per cent.

The media sector firmed, with Vivendi Universal, which has gained 50 per cent since its trough of September 14th, adding another 0.3 per cent to €61.50. Vivendi is the biggest shareholder in Poland's conglomerate Elektrim, which on Thursday unveiled plans to write off 40 per cent of its debt to avoid bankruptcy.

On the other hand, Vivendi's plans to take over USA Networks hit a snag. Two US shareholders sued to block the deal, saying USA's board failed to auction the company to the highest bidder.

French broadcaster TF1 announced it would buy 25 per cent of satellite service TPS from joint owners France Telecom and France Television, taking its stake to 50 per cent. TF1's shares rose 0.7 per cent to €28.39 while France Telecom slipped 0.3 per cent to €44.90.

French electrical components group Schneider rose 4 per cent to €54 after its chairman said it would seek new acquisition targets.

Germany's large insurers had a good day. Allianz rose 2.5 per cent to €266 while Munich Re, the world's biggest reinsurer, was 0.9 per cent higher at €304.95. Traders pointed out, however, that turnover fell far short of recent levels.

The oil majors and other oil-linked stocks were higher after OPEC agreed to cut crude oil supplies by 1.5 million barrels a day from January for six months. Royal Dutch put on 1.1 per cent to €56.90 and TotalFinaElf put on 1.7 per cent to €160.40.