LONDON (CNNfn) - Inspired by a Wall Street rally on the back of IBM and Dell Computer's multibillion dollar pact, Europe's bourses galloped ahead Thursday. But the high spirits were tempered by uncertainty ahead of the release of key U.S. jobs data on Friday.
After markets closed, the European Central Bank announced that it would hold its key lending rate at 3 percent, a decision largely anticipated by traders throughout the day.
Shares in Paris leapt 2.09 percent on the CAC-40, fueled by the Dow's strength and sharp gains in the banking sector after Belgian bank KBC bid for a 7.8 percent stake in French rival CCF.
CCF shares shot up 2.77 percent to 83.40, while Banque Nationale de Paris (PBNP) soared 5.34 percent to 79.90 euros and Société Générale climbed 2.35 percent, or 3.2 euros, to 139.3. The CAC-40 rose 83.83 points to 4,087.99, reversing its prior-day decline, when the index slipped 1.1 percent.
In London, blue chips on the FTSE 100 climbed 0.88 percent to 6,101.4, propelled by a boom in oil stocks triggered by nascent hopes for a recovery in sagging crude-oil prices. BP Amoco finished up 4.5 percent as Shell (SHEL) surged 5.37 percent to 348.8.
Nonetheless, an air of caution prevailed as investors awaited U.S. February unemployment data due out Friday, which will offer another gauge as to whether the Fed is likely to hike interest rates.
On Wednesday, the Bank of England decided to hold its key lending rate at 5.5 percent.
In Frankfurt the electronically-traded Xetra Dax rose modestly despite a fresh dollop of economic data showing the Germany economy contracted 0.4 percent in the fourth quarter of 1998, the latest in a litany of weak economic numbers. Officials attributed the GDP shrinkage to weak exports offset only slightly by robust domestic demand.
Hemmed in by the gloomy economic figures, and a generally poor outlook for short-term growth, the Dax ended 1.16 percent higher at 4,722.69.
Engineering giant Siemens (FSIE) spiked more than 6 percent amid speculation the industrial group is planning to invest 1.6 billion euros ($1.67 billion) in a U.S. data networking venture. The company would not comment on The New York Times report pending a news conference in New York Monday. The shares rose 3.25 euros to 56.70 in Frankfurt.
Business software group SAP [FSE:FSAP3] dipped marginally to 318 euros on the back of news late Wednesday that a senior U.S. executive had defected to a competitor.
In Zurich, the SMI advanced 1.73 percent to 7,106.8. Roche jumped 1.7 percent to 18,780 francs after the company secured European regulatory approval for its Zenapax kidney drug. Roche said it expects the drug to hit the EU market in April, with Germany the likely launching point. Swissair parent SAir Group shed 5.50 francs to 303.
In London, robust earnings and a special dividend catapulted shares in insurer Royal Sun & Alliance (RSA) to the head of the gainers list on the FTSE 100. Royal shares rocketed 6.17 percent to 579 pence after the company rolled out a surprise special dividend of 750 million pounds ($1.21 billion) and reported operating profits that handily beat expectations.
Vickers (VICK) stock edged up just over 1 percent to 149 pence after the company unveiled a strategic refocusing plan and termed its outlook for 1999 "very good."
Shares of Dutch business software firm Baan continued their retreat Thursday, plummeting 8 percent to 6.90 euros in Amsterdam after the company reported a $315 million full-year loss and forecast more difficulties on the horizon.
Europe's common currency, the euro, continued its steady decline Thursday, dipping at one point to another lifetime low of $1.0845 - a more than 7 percent drop since its launch at $1.17 in early January.
--From staff and wire reports