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Europe soars on US rate cut
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April 18, 2001: 12:39 p.m. ET
European bourses cheered by US rate cut, tech sector
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LONDON (CNN) - European shares surged on Wednesday after the Federal Reserve cut key interest rates by half a percentage point in a bid to revive the flagging U.S. economy.
European markets had earlier been cheered after U.S. chipmaker Intel issued an upbeat earnings forecast, offering investors hope the world's battered tech sector may be reviving.
London's benchmark FTSE 100 index closed higher by 2.32 percent, or 133.6 points, to reach 5,894.7, with chip designer ARM Holdings (ARM) leading the gainers, soaring 24.92 percent higher.
In Paris, the blue-chip CAC 40 jumped 3 percent, or 159.98 points, to 5,500.96, led by engineering software maker Dassault Systemes (PDSY) and network equipment maker Alcatel (PCGE).
Frankfurt's electronically traded Xetra Dax leapt 3.73 percent, or 221.51 points, at 6,157.09, with electronic component maker Epcos (FEPC) and Deutsche Telekom (FDTE) topping the leader board.
Amsterdam's AEX index was up 2.7 percent, the MIB30 in Milan rose 1.6 percent and Zurich's SMI was nearly 1.3 percent higher.
The broader FTSE Eurotop 300 index, a basket of Europe's largest companies was up 2..6 percent, with the information technology hardware component soaring 12.19 percent and the computer software and services sub-index more than 10 percent higher.
In the currency market, the euro fell against the dollar, buying 87.80 U.S. cents, compared with 88.32 cents in late New York trading a day earlier.
Earlier, U.S. stocks, already higher on cautious optimism about earnings, soared following the Federal Reserve's decision to cut the overnight bank lending rate to 4.5 percent.
The Dow Jones industrial average rose about 3.7 percent and the tech-heavy Nasdaq jumped 8.7 percent.
In Frankfurt, electronic component maker Epcos (FEPC) jumped 13.9 percent and Deutsche Telekom (FDTE) rose 8.8 percent.
In Paris, software maker Dassault Systemes (PDSY) surged 14 percent and network equipment maker Alcatel (PCGE) rose 11.6 percent.
STMicroelectronics (PSTM) advanced 8.8 percent, while Dutch chip making equipment firm ASM Lithography gained more than 14 percent in Amsterdam.
Philips, which makes chips and consumer electronics, rose 10.2 percent after slumping 9.8 percent a day earlier when the Dutch company said it expected to post a net loss in the second quarter and announced plans to cut up to 7,000 jobs.
Europe's largest software maker SAP (FSAP3) rose 8.5 percent.
Telecom equipment maker Nokia leapt 15.75 percent while Ericsson, the world's No. 1 mobile phone network equipment maker, rose 10.4 percent in Stockholm. 
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