European exchanges posted impressive gains on Friday on healthy growth prospects in the eurozone, strong corporate earnings in the US and a wave of takeover talk.
Records were set in Brussels, Madrid and Zurich while markets in London, Paris and Frankfurt ended the week well into positive territory.
The deep anxiety that pervaded global markets in late February and early last month, when a sharp correction set in worldwide, has been replaced by buoyant optimism, traders said.
"The fears that became apparent in February were centered in the United States," said Francois-Xavier Chauchat, an economist with Credit Agricole Cheuvreux bank.
"While there are no signs of a change today, with the United States suffering a housing market slowdown, the trend has not had a major negative impact on the rest of the economy," he said.
He added that Friday's surge also reflected "an upward revision to eurozone growth prospects" and reports of takeover moves, notably a possible tie-up between Societe Generale of France and Italian bank UniCredit.
In London the FTSE 100 index gained 0.72 percent to end the week at 6,486.80 while in Paris the CAC 40 rose 1.88 percent to 5,938.90, its highest reading since January 2001. The Frankfurt DAX added 1.38 percent to reach 7,342.54.
The Euro STOXX 50 index of leading eurozone shares jumped 1.77 percent to 4,416.79.
On the currency market the euro hovered close its record against the dollar, with analysts predicting that a new peak will be reached next week. The current record for the euro is US$1.3666, set on Dec. 30, 2004.
The single European currency in late trade was at US$1.3602 against US$1.3609 late on Thursday in New York.
In New York the leading Dow Jones Industrial Average share index, already riding record highs, approached 13,000 as investors' cheered a flurry of upbeat profit reports from corporate America.
A strong profit report from Internet search giant Google late on Thursday and solid earnings performances from pharmaceutical heavyweight Pfizer and McDonald's on Friday helped boost investor sentiment.
In London pharmaceutical group Alliance Boots surged 7 percent to close the day at ?1.25 as US and British private equity groups launched rival cash bids approaching ?1 billion (US$22 billion).
The banking sector was bolstered by rumors that Societe Generale of France could be a takeover target for UniCredit of Italy.
Lloyds TSB rose 0.95 percent to close at ?.83 while Standard Chartered added 3.95 percent to reach ?5.28.
Societe Generale jumped 7.74 percent to 156.09 euros in Paris on reports that it was in tie-up talks with UniCredit. But Societe Generale later denied that any such negotiations were taking place.
Steel group Vallourec rose 9.16 percent to 207 euros on renewed speculation it might be of interest to the world's leading steel producer Arcilor Mittal. Arceilor Mittal shares gained 4.69 percent on the day to reach 40.66 euros.
In Frankfurt shares in engineering giant Siemens shot up 4.15 percent to 90.35 euros after the company, plagued by corruption allegations, said its former chief executive and current supervisory board chief Heinrich von Pierer was to quit next week.
Elswhere there were gains of 1.77 percent to a record 4,630.43 in Brussels, 1.75 percent to a record 15,080.9 in Madrid, 1.54 percent to a record 9,399.75 on the Swiss Market Index, 1.46 percent to 536.36 in Amsterdam and 1.34 percent to 43,549 in Milan.
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