NEW YORK (CNNmoney) - Europe's main bourses ended the trading session higher Tuesday, overcoming an earlier scare caused by a suspicious package at the London Stock Exchange and boosted by gains in the technology sector.
London's FTSE 100 closed 15.3 points higher at 5,082.6, eroding an earlier gain of over 90 points, while the CAC 40 blue chip index in Paris finished 2.24 percent higher at 4,308.49.
Frankfurt's electronically traded Xetra Dax was up 1.25 percent, or 57 points, at 4,605.22, reversing a two-session downturn in late day trading.
Telecoms were the strongest sector, adding some 10 points to the FTSE 100, while defensives were under pressure as investors sought cyclicals and economically sensitive stocks that might benefit from economic recovery, anticipated next year.
News that staff at the London Stock Exchange were taken to hospital for medical tests after a suspect package was received at the exchange sent a shudder around the market late in the session and rekindled jitters over the threat of reprisals for the U.S.-led strikes in Afghanistan, traders said.
In the telecom sector, British Telecom (B) ended down 2 percent after news that it is ending its Concert joint venture with AT&T (T: down $0.53 to $18.67, Research, Estimates).
Vodafone (VOD) rose 2.4 percent and Cable & Wireless (CW) jumped 5.8 percent on the view it might win out as one of its global competitors comes apart.
France Telecom shot up 9.59 percent and Vivendi Universal added 6.97 percent.
Elsewhere telecom equipment maker Alcatel, the worst CAC-40 performer so far this year, led revived tech shares with a gain of 8.62 percent after Dutch tech firm Philips said orders for semiconductors are starting to pick up.
Alcatel has lost over 75 percent of its value since the year started amid worries over slower spending by debt-burdened telecoms.
STMicroelectronics, which is due to report third-quarter earnings Thursday amid analysts' fears of a bleak year-end outlook, added 3.77 percent.
Chipmaker Infineon led Germany's DAX higher on Philips' optimistic chip order outlook, with other tech stocks tacking on more upside and financials adding push.
Infineon gained 6.5 percent to  16.65, rising along with other chip-related stocks.
"After so much bad news about the state of the industry, this is a welcome relief and it is fuelling buying," one trader said. "People are thinking, perhaps the worst of the slump is over."
Heavily weighted electronics group Siemens (FSIE) gained 2.4 percent to 48.89.
Lufthansa (FLHA) shares rose 3.5 percent to 11.65, rebounding from steep losses in the previous session, but market players said worries about the German airline's financial health still are lurking.
U.S. equity markets backed away from earlier signs at midday as a mixed earnings picture combined with continued bio-terrorism concerns gave stock investors reason to pause.
At noon ET, the tech-laden Nasdaq composite index added 6.45 to 1,702.76. The Dow Jones industrial average fell 9.54 to 9,338.08. The Standard & Poor's 500 tacked on 1.48 to 1,091.46. 
--from staff and wire reports
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