European share prices rose early on Tuesday amid expectations of lower interest rates after the reduction in Italian rates the day before and on the ensuing rise in the value of the dollar against most European currencies.

Frankfurt

Germany's Dax index began a third consecutive day of gains on Tuesday boosted by dollar strength and a number of better-than-expected company results.

By 0915 GMT, the electronically traded Xetra Dax was up 46.33 points at 4,625.97 points.

The floor Dax rose 48.22 points to 4,626.73 points.

"Although I am tempted to say it will go higher, it is very difficult to say whether we'll be able to hold this ground or not, as the volumes are so tiny," a trader said.

The volume of trade on the Dax has been small for a number of weeks, which has made the index susceptible to big moves.

"There really is nothing going on, with people staying away because of uncertainty about the new government and the extent of the financial crises in the world at large."

Paris

In Paris, the Cac 40 raced up more than 1% at the opening, receiving an early lift from dollar strength, the Italian rate cut and overseas strength.

The Cac 40 index opened at 3,506.68.

However traders said the market was calm, holiday-bound and still hesitant.

Rhodia added nearly 5% after returning to the black in the first nine months, despite a slowdown in third quarter sales.

PSA Peugeot Citroen was ahead after its 9-month sales rose 12.4%, confirming a healthy trend, and Renault also outperformed.