Frankfurt

Shares finished the day close to session highs, buoyed by gains on Wall Street.

The Dax finished 136.64 higher at 4841.72.

"There's too much cash in the market," said Joerg Schreiweis, head of equity sales at Deutsche Genossenschaftsbank.

Since Friday, when G7 finance ministers agreed to back a new International Monetary Fund rescue package for ailing economies and hinted at international supervision of hedge funds, investor confidence has blossomed.

As a result, the popularity of safer investment havens has decreased.

And dealers also say the trend towards equity investment got a further boost from news that US Democrats did well in Mid-Term elections, reducing the chances of President Bill Clinton being impeached.

Shares in electronics group Siemens surged on news that it plans to spin off its loss-making semi-conductor unit.

The news came as Siemens released its preliminary fiscal earnings for 1998.

Dealers also said Siemens' DM4bn restructuring charge was another plus, as it showed the group's commitment to the 10-point restructuring plan announced in July.

Paris

Shares enjoyed strong gains, helped by Wall Street's strong showing, a rising dollar and yesterday's interest rate cuts in Sweden, Spain and Portugal.

The Cac 40 closed 100.52 points higher at 3684.16.

Shares in defence electronics group Thomson CSF were stronger. The firm's Spanish IT unit, Indra Sistemas, is to announce an alliance with one of its major shareholders.

Indra is 63%-owned by the Spanish government and 25%-owned by Thomson-CSF.

Shares in state-controlled banking group Credit Lyonnais continued to benefit from speculative buying interest ahead of its privatisation early next year.