Shares in Paris climbed to just below their all-time peak as doubts weighing on the market about US interest rates began to ease. The CAC-40 index put on 165.1 or 2.6 per cent to 6,557.39.
Telecom stocks accounted for a large part of the rise. France Telecom, which announced it is to sell its 7 per cent stake in Telmex, Mexico's dominant phone company, rose €10.20 or 6.8 per cent to €161.30. Mobile phone operator Bouygues powered ahead 7.7 per cent to €671.
Other TMT shares were also higher, including network equipment maker Alcatel, up 3.4 per cent to €291.50, and chipmaker STMicroelectronics, up 5.5 per cent to €74.25.
Luxury goods group LVMH rose 3.4 per cent to €472.90 as it confirmed it had halved its stake in British drinks group Diageo which would free more than €1 billion in cash for acquisitions.
Frankfurt easily recouped its losses of the previous session, gaining 175.91 at 7,371.06 on the Xetra DAX index after a strong run for technology and financial stocks.
Deutsche Telekom, weak lately on oversupply concerns before next month's offering of state-owned shares, rebounded €4.14 at €66.15. Siemens put on €4.61 at €158.57 and Epcos €6.80 at €145.10.
Financials put interest rate stresses to one side, moving higher in good volumes. Deutsche Bank rose €2.85 to €82.30, and Dresdner, ahead of Friday's annual meeting, gained €1.83 at €45.60. Insurers also bounced with Allianz up €11.40 at €412.96.
Amsterdam saw active trading in Ahold after the retailer released an upbeat trading statement.
The shares surged €1.01 or 3.8 per cent to €27.73 after a high for the session of €28.37 in some of the heaviest trading on record. Nearly 31 million shares changed hands.
The AEX index ended 9.75 higher at 676.81.
Zurich closed at a high for the year for the third time in four sessions, led up by financials that were undeterred by the prospect of higher US interest rates later in the day.
The SMI index closed 45.1 higher at 7,768.0.
