Europe gets lift from Wall Street

German tarder watches as telecom and technology stocks continue to slide

LONDON, England (CNN) -- European markets clawed back early losses to end slightly higher on Monday, led by technology stocks and supported by a strong start to the week on Wall Street.

London's FTSE 100 closed up 0.7 percent to 5,204.8 and the CAC 40 blue chip index in Paris added 1.1 percent to 4,375.39, while Frankfurt's electronically traded Xetra Dax was up 2.2 percent to 4,976.97 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, rose 0.9 percent, with the computer and electronics sub-indices among the top gainers.

The U.S. gains early on Monday came after two brokerages published upbeat comments on tech heavyweights Qualcomm and Applied Materials, putting a positive spin on the sector and reversing losses from last week.

On Friday, the tech-laden Nasdaq composite index dropped 3 percent after telecom company WorldCom saw its bonds downgraded to "junk" status by Standard & Poor's. The Dow Jones Industrial Average also ending the week on a low note, falling 1 percent.

The negative sentiment kept many European tech and telecom stocks under pressure for much of the Monday session, before turning around later as Wall Street headed higher.

France's Alcatel (PCGE), the world's fifth-largest telecom equipment maker, rose 3.8 percent in Paris. German chipmaker Infineon (FIFX) was up about 5 percent in late Frankfurt trading, while electronics and engineering giant Siemens (FSIE) was 3.6 percent higher.

French mobile phone operator Orange (PORA) gained 2.9 percent, while its parent company, France Telecom (PFTE), rose 1 percent. Deutsche Telekom (FDTE), Germany's dominant telecom group, was up 3.4 percent in late Frankfurt trading.

Spain's Telefonica Moviles rose 1.3 percent after posting a better than expected first half profit as it signed up more than half-a-million subscribers in Spain. (full story).

Not faring as well was Cable & Wireless (CW-), the UK Internet data carrier, which lost 2.6 percent. The Sunday Telegraph said its chairman Ralph Robins is expected to step down as early as this week. The company, which is under pressure to change its board as its stock languishes at a 13-year low, reports its full-year results on Wednesday.

Vodafone (VOD), Europe's biggest mobile phone company, slipped 0.3 percent -- off its session lows -- and rival Mmo2 (OOM), the region's fifth-biggest operator, fell 3.3 percent in London.

Nokia, the world's biggest mobile phone maker, rebounded from early losses to post a gain of 2.8 percent, while Swedish rival Ericsson lost 1.7 percent.

In Amsterdam the AEX index rose 0.6 percent and the SMI in Zurich added 0.5 percent, while Milan's MIB30 index gained 1.6 percent.