A technology-led rally and a better early showing on Wall Street sent European markets higher yesterday, calling a halt to an eight-session losing streak.
News that South Korea's debt ridden Hynix Semiconductor was to open talks on an alliance with US group Micron Technology raised hopes of a reduction of chronic oversupply in the memory chip sector and lifted European semiconductor manufacturers.
Germany's Infineon, the world's fourth-largest chipmaker, in merger talks with Toshiba, leapt more than 8 per cent.
Telecoms equipment maker Nokia jumped 4 per cent, apparently as some investors woke up late to Monday's news that the group had won its biggest order.
The tech sector led the FTSE Eurotop's gains with the sub-index registering a gain of 4 per cent, a rise of almost 70 per cent from its September 21st low.
The day also brought more, mostly optimistic, forecasts for the outlook in equity markets.
Schroder Salomon Smith Barney said lower oil prices, inflation expectations, short rates and bond yields had shifted equity markets into a rates-driven phase.
"Our forecast that the pan-European index will deliver a 12-month performance of about 12 per cent is at risk of proving too conservative," the investment bank said.
And F&C Management predicted a US-driven global economic recovery in the second half of 2002, with a "strong rebound" in equities.
"After two years in which the performance of bonds has beaten equities, we expect the equity markets to outperform next year," said Mr Arnab Banerji, the group's chief investment officer.
