LONDON, Sept 26: European stocks surged on Thursday, buoyed by bullish remarks from Finnish telecommunications equipment maker Nokia and further strong gains on Wall Street where robust US data eased recessionary fears.

Across the 12-nation euro zone, the Euro Stoxx 50 index leapt 6.2 per cent to 2,377.4 points in late deals.

The British FTSE 100 index rose 4.2 per cent to 3,850.6 points, the German DAX 30 index added 3.0 per cent to 3,050.6 points in late trade, while the Paris CAC 40 index climbed 3.4 per cent to 2,878.8 points.

“We saw a huge buy order on Wednesday) which has continued to trigger short covering,” said Nomura strategist Anais Faraj.

But Faraj was sceptical the improved tone would be maintained for long, given ongoing concerns about a range of issues from weak economic growth, falling corporate profits and a possible war in Iraq.

“It’s a dead-cat bounce. The markets are already starting to look overbought,” he told AFP.

Having traded up from the outset, stocks were given a much-needed shot in the arm after a senior Nokia executive said annual sales of hand-held telephones should grow by 10-15 per cent over the next few years.

Kari-Pekka Wilska, president of Nokia Americas, told an investment conference in the United States organized by Banc of America Securities that his projection was based on the current average replacement cycle of 2.5 years.

On Wall Street the Dow Jones Industrial Average followed up strong gains the previous day by jumping another 1.7 per cent by early afternoon on Thursday, while the technology-laden Nasdaq Composite index edged 0.3 per cent higher.

The rally in US stocks was aided by the release of US economic data which suggested talk of a “double-dip” recession may have been overdone.

Figures on both the US housing and jobs markets came in stronger than predicted and helped counteract the negative impact of another profits warning — this time from Nortel Networks.

Stocks were in better shape in Asia too, with shares rallying 1.7 per cent in Tokyo and the Hong Kong market climbing 1.6 per cent.

The euro was flat at 0.9764 dollars as the US unit recovered on the back of the data.

Financial and telecoms issues, which have endured a torrid time of late, were among the best performing stocks.

Shares in Nokia surged 10 per cent to 14.48 euros following Wilska’s remarks.

But Faraj predicted the recovery in Nokia shares would be short-lived.

“So what if handset sales are up 10-15 per cent. You’re not going to go through 15 euros on the back of that.

“There’s still no sign that the telecoms operators are going to spend on capex (capital expenditure) and that’s where the (profit) margin is going to come from,” Faraj said.

Among other telecoms issues, shares in BT Group rose 8.6 per cent to 167.25 pence, while France Telecom rose 7.8 per cent to 8.00 euros.

In London, Royal and Sun Alliance surged 8.6 per cent to 104.75 pence, buoyed by a favourable US court ruling on the company’s potential liabilities to the September 11 terrorist attacks.

And among other stocks in the sector, Munich Re gained 7.6 per cent to 121.55 euros, while Swiss Re climbed 10.8 per cent to 86.60 Swiss francs.

But shares in Allianz were a weak spot, sagging 4.6 per cent to 98.16 euros on speculation that Munich Re was looking to place its stake in the company.

The slide in Allianz’s share price came as its banking subsidiary Dresdner Bank confirmed it was to cut 2,700-3,000 jobs.

Shares in Air France climbed 5.8 per cent to 8.99 euros after chairman Jean-Cyril Spinetti said he was in favour of a quick privatisation of the airline.—AFP