HP Compaq deal sets market pulses racing

European tech stocks surged this morning following news overnight of a $25bn takeover of Compaq by HP.

Both companies saw their stock retain Friday's low at the close of yesterday's Nasdaq session- HP dropped 0.81 per cent to $23.21 and Compaq fell 2.68 per cent to $12.35 - but trading in Europe was upbeat this morning. The FTSE opened up 0.8 per cent with the TechMark up 1.8 per cent.

Across Europe the Paris CAC and the Frankfurt Dax both rose 0.9 per cent.

Chip company Parthus headed the UK stock surge, jumping 7.79 per cent, ARM rose four per cent and software companies Sage and Misys both added over three per cent.

Internationally, news of the merger saw Sun Microsystems leap 3.43 per cent and Dell rising 1.18 per cent. IBM lost 0.41 per cent.

In the US the Dow Jones index closed up 0.3 per cent while the Nasdaq added 0.8 per cent. The Nikkei closed up 3.5 per cent.