Wall Street's positive performance on Friday followed by a strong showing in Asia helped to lift European shares in early trade.

Frankfurt

Shares were higher across the board in early Xetra trade, supported by Friday's higher close on Wall Street and by the firmer dollar.

At 0915, the Xetra Dax stood at 4,878.78, up 76.02 from Friday's Xetra close.

In floor trade, the Dax stood at 4,871.03, up 95.80 from Friday's close.

Financials stocks were all higher, led by Deutsche Bank, which gained 2.26 to 101.50. Dresdner Bank was 1.75 higher at 73.45, HypoVereinsbank up 3.50 at 140.00, Commerzbank up 1.20 at 52.25 and Allianz added 6.90 at 601.40.

Cars were also higher, with both BMW and VW up around 3 pct. BMW was 33.30 higher at 1,089.00 and VW was up 3.90 at 135.90.

DaimlerChrysler was 2.85 higher at 149.55, as press reports continued to focus on the prospect of an imminent merger of Dasa with British Aerospace.

Chemicals were higher, boosted by the firmer dollar. Hoechst was 1.74 higher at 72.79, Bayer was up 1.00 at 67.35, BASF gained 1.01 to 61.51and Henkel added 3.90 to 133.90.

Utilities and industrials were stronger, with Viag up 25.50 at 1,014.00, Veba up 1.05 at 92.30 and RWE 1.31 higher at 88.51.

Mannesmann was up 2.20 at 185.90, while Siemens continued to suffer after last week's falls, with the share adding just 0.10 to reach 102.90.

Deutsche Telekom was up 0.55 at 50.05, with the market left cold by reports the company is looking at a merger, dealers said.

Paris

Paris stocks open 0.9% higher on Monday, boosted by Dow's return to 9,000 level and sharp gains on the Hang Seng.

The Cac 40 index was up 1.46% at 3,793.07 at 0910 GMT.

A firmer dollar is helping to offset worries about economic growth outlook.

Traders expect a positive tone throughout the session, as index recovers from last week's 5.3% loss.

Bouygues fell more than 7% after news it has signed a three-year shareholder pact with Francois Pinault.

Bull was up 5.34% after news it is merging electronics payments systems with Ingenico.