French stocks finished higher after investors took heart from the early rise on Wall Street. Having breached resistance at 2,125 points, its next objective is its year high of 2,164.15.

Frankfurt DAX 2546.35 (-12.46)

Shares closed just off record highs, boosted by stronger German bonds and a firmer dollar following lower than expected US producer price data.

Shares rose further in post bourse electronic trading and should open strongly today.

MILAN MIBTEL 10475-54

A call by the Italian finance minister, Mr Vincenzo Visco, for a shake up in the way financial income is taxed sent a brief shudder through equity and bond markets.

Italian stocks fell 2 per cent at one point, but the markets recovered as investors digested Visco's comments. Government bonds, and the ire also fell.