The overnight results from US chip giant Intel gave a powerful lift to the European tech sector.

Intel, which said only last month that fourth-quarter sales would not meet expectations, managed to post earnings that just beat forecasts. It warned, however, that first-quarter sales would fall 15 per cent from the fourth quarter.

SAP, Europe's largest software company, showed the way in Frankfurt with a rise in the preference shares of 7.2 per cent to €188.75. The shares have risen almost 51 per cent since the close of trade on January 5th.

Software group Intershop shot 8.9 per cent higher to €11.37 on speculation that SAP might bid for the troubled group. Analysts, however, were sceptical, saying SAP had no tradition of buying large software companies.

Other winners in Frankfurt were semiconductor maker Infineon, up 5.3 per cent at €45.22, Siemens, 4.3 per cent higher at €151.70, and electronics components maker Epcos, which added 4.9 per cent at €104.

In Paris, chipmaker STMicroelectronics shot up 10.2 per cent to €48.50 and Cap Gemini rose 4.9 per cent to €195.90.

ASM Lithography, set to unveil full-year results today, soared 9.4 per cent to €29.98 in Amsterdam. Some traders suggested that Intel's decision to increase capital expenditure in 2001 should help ASM, although the Dutch group is not a direct customer of Intel.

Italian publisher and Internet operator Seat was suspended on growing expectations that anti-trust approval for its purchase of television broadcaster Telemontecarlo was imminent. At the close, the shares were 13.2 per cent higher at €2.39.