Frankfurt

German shares slipped from session highs after a lacklustre start to trade on Wall Street.

The Xetra Dax closed 99.21 points higher at 4579.64.

Some traders said that continuing rate cut speculation and a spate of short-covering kept the market well supported.

Car stocks were up generally on recent analyst recommendations.

Volkswagen and BMW were singled out by Lehman Brothers.

Traders said Volkswagen shares drew interest in the run-up to the unveiling of its 9-month results later in the day.

The company said 9-month group sales rose 19% to DM99.95bn from DM84.01bn.

Daimler said around 97% of its shares were exchanged for shares in DaimlerChrysler, taking the merger a step closer.

The machinery sector was also robust on the reassessemnt of cyclicals as the opportunity stocks of the moment.

MAN and Linde climbed.

Paris

Shares consolidated the morning's advance after sentiment was boosted by renewed hopes of cuts in core European interest rates.

The Cac 40 index finished 55.72 points higher at 3449.48.

"Pressure is clearly heightening on European central banks to cut their interest rates in the wake of the Poertschach meeting," said Denis de Ambrogi, a trader at BNP Equities brokerage house.

At an informal summit in the Austrian town of Poertschach on Saturday, leaders of the 15 European Union states signaled they would favour an easing monetary policy.