LONDON (CNNfn) - Europe's major stock markets all closed higher Tuesday after recovering from a weak morning session with support from a strong showing on Wall Street.
Frankfurt's blue-chip index ended almost 2 percent ahead, Paris added 1.5 percent and London gained 0.7 percent. In the currency market, the euro slid to a record low against the dollar.
Defensive plays such as oil and gas shares and aerospace companies moved strongly ahead while tech and telecom shares had mixed fortunes, with most marked down after the sharp fall in the Nasdaq composite Monday.
London's benchmark FTSE 100 closed up 42 points, or 0.67 percent, at 6,283.0, off a session high of 6,313. Media firm EMAP (EMA) leading the index with a 6.8 percent advance after being linked to a possible takeover bid from Internet portal Yahoo! (YAH: Research, Estimates). Oil and gas producer BP Amoco (BPA) added 4 percent, while the market was held back by a 7 percent slump in mobile-phone operator Vodafone AirTouch (VOD).
Frankfurt's Xetra Dax ended 123 points higher at 7,280.51, buoyed by firm demand for financial and chemical shares. In Paris, the CAC 40 closed up 90 points at 6,324.99, with banking and drug stocks helping to counter the weak telecom and media sectors. Drug maker Aventis (PAVE) led the market with a 5.3 percent rise after U.S. regulators approved Lantis, a diabetes treatment.
The Nasdaq was up 4 percent at the close of European trade, while the Dow Jones industrial average had put on 0.6 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, closed up 1.1 percent at 1,607.67, with its energy and aerospace sub-indexes both climbing 4 percent. Tech and telecom shares were down 2 percent.
In the currency markets, the bearish outlook for the euro intensified as the single currency ended European trading at $0.9265. It had earlier slumped to a record low of $0.9248, some 1.3 cents below its New York close Monday. Comments from a senior German economist that the country had lost faith in the currency eroded any potential gains in euro-zone interest rates when the European Central Bank meets Thursday.
BP Amoco holds up FTSE
In London, investors piled into defensive stocks such as oil and gas firm BP Amoco (BPA), sending the FTSE 100's second-largest component up almost 6 percent. BAE Systems (BA), an aerospace and defense firm, rose 6.3 percent, and banks also had firm demand as Abbey National (ANL), Britain's second-largest mortgage bank, gained 5.8 percent.
 Handheld computer maker Psion (PON) led a generally weak tech sector with a 6.9 percent advance. Centrica (CTN), the gas distributor, rose 4.7 percent after announcing plans to launch a mobile-phone service.
London was pegged back by a 7 percent slump in mobile-phone operator Vodafone AirTouch (VOD), the FTSE 100's largest component. Other shares in the sector also lost ground, with regional operator Kingston Communications (KCOM) ending off 4.3 percent and Colt Telecom (CTM) losing 4.8 percent.
Chip designer ARM Holdings (ARM) was 3.5 percent lower and Internet service provider Freeserve (FRE) dropped almost 5 percent. Dixons (DXNS), an electrical goods retailer that owns 80 percent of Freeserve, was the FTSE 100's weakest performer, losing some 6.7 percent.
Cyclicals lift Frankfurt
In Frankfurt, chemical firms BASF (FBAS) and Bayer (FBAY) both rose more than 3 percent, benefiting from a switch into cyclical stocks from volatile tech shares.
Insurer Munich Re (FMUV) topped the index with a 5.8 percent advance while sector rival Allianz (FALV) was 3.8 percent ahead at the close.
 Automaker BMW [FSE:FBMW] was 3 percent higher after the U.K. government asked it to delay a final decision on the sale of its loss-making Rover unit to allow potential bidders more time to assess the business. Deutsche Telekom (FDTE) was the main drag on the Dax, sliding 1.7 percent.
In Paris, drug maker Aventis (PAVE) led the market with a 5.1 percent rise after U.S. regulators approved Lantis, a diabetes treatment. Oil and gas producer TotalFina (PFP) gained almost 5 percent, Société Générale (PCGE) rose 4 percent and BNP Paribas (PBNP) added 3.8 percent.
Automaker Renault (PRNO) rose almost 6 percent after agreeing to sell its truck arm to Sweden's Volvo to create the world's second-largest truck maker, in which Renault would have a 20 percent stake. Volvo shares jumped almost 7 percent.
However, pay-TV broadcaster Canal Plus (PAN) and media-utility company Vivendi (PEX) both were 3 percent lower while France Telecom (PFTE) shed 1.3 percent.
Among smaller markets, the SMI in Zurich added 0.8 percent at 7,433.20, the AEX in Amsterdam rose 0.2 percent to close at 659.31, and the Mib-30 in Milan was the region's best performer, ending 1.2 percent higher at 45,388.
The Finnish market was pushed ahead by a 5.5 percent gain in forestry-products firm UPM-Kymmene as International Paper (IP: Research, Estimates) trumped the Finnish company's bid for U.S.-based Champion (CHA: Research, Estimates). 
-- from staff and wire reports
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