Europe's stock markets soared on Tuesday, driven by a boom in telecoms and technology shares.

Paris and Frankfurt were among the bourses which closed at record highs.

This latest trend for high-tech stocks has been running for a week or so, and on Monday the technology-heavy Nasdaq index in New York closed at a new high of 4,321.77 - the first time it had breached 4,300.

That had an impact on trading throughout the day in Europe.

In Frankfurt, the Xetra Dax index reached an intra-day high of 7570.55 before falling back slightly to end 253.56 points up at a record 7,549.88.

In Paris, the Cac 40 Index hit a new intr-day high of 6,396.39, before settling back to finish up 94.08 points at 6,297.66, a record closing high.

Finnish shares also set a life high. The HEX general index closed up 1.5% at 16,318.84 points. It was helped by Nokia ending up 1.7% at a record close of 200.95, the first time it has ended above 200 euros.

There were record closes in Copenhagen and Madrid and in London, the FTSE 100 scored its biggest one-day points gain in seven months, bouncing 2.7%. The market was powered by Vodafone Airtouch, which jumped 6.1% to lift the FTSE 100 by about 32 points.

Meanwhile, the Nasdaq continued its upward path, ending Tuesday up 105.42, or 2.4%, at a new high of 4,427.19.

Deutsche Telekom was one of the most influential shares, rising by 9.3%.

There has been speculation that the company will be involved in the next telecoms mega-merger - either as the predator or the prey. The stock has now gained 16% in the past few days.

Siemens was another big gainer, up 4.91% after saying it expected its Information and Communications division to increase its sales by more than the industry average of 10% annually until 2004.

Other movers included Philips Electronics, Vivendi, France Telecom, Telefonica.

All this movement pushed the Dow Jones pan-European telecoms index up by 4.97%.

Volatile nature

The markets were also cheered by US productivity figures showing a 5% rise in the final quarter of 1999, maintaining the fastest increase since 1992.

Telecoms stocks are flavour of the month since the huge merger between Vodafone AirTouch and Mannesmann, agreed last week.

That deal has opened up many new possibilities, and the volatile nature of telecoms shares has seem big rises in many of them on the back of speculation.

"We are in a bear market globally right now," said one London dealer. "People are buying into the tech sector that's seen as a winner in the current environment, but they are selling out of anything else to get into the new economy."