LONDON, Dec 31: Most European stock markets advanced again on Tuesday with cash- ' rich institutional investors massaging portfolios higher ahead of the end of the year, reports Reuter.

News that banks in Japan, the United States. Canada and Europe had agreed to help resolve South Korea's liquidity crisis gave a boost to most western equity markets.

But traders said share price movements were exaggerated by low trading volumes, which, af-lowed small-scale buying or selling to have a disproportionate impact on stock values.

"It takes one inquiry in a stock and that will be enough to move it." said a sales trader at a large European investment bank.

The dollar struck a firm tone, as relief about the Korean package encouraged some investors who had parked funds In the mark and Swiss franc as safe havens from the Asian turmoil to switch them back into the US currency.

Gold, a poor performer for much of the year, traded at Just above 290 dollar an ounce, well shy of a recent four-week high of 296.20 dollar posted early on Christmas eve.

Early strength on Wall Street, where the Dow Jones Industrial Average gained almost one per cent In the first two and a half hours after rising by 1.5 per cent on Monday, gave an extra fillip to most European equity markets in the afternoon.

Madrid. Lisbon. Zurich. Milan and Copenhagen set record share index highs, with most other European markets also advancing although Frankfurt slipped by one per cent.

In London, the FTSE 100 index ended 0.4 per cent stronger despite a warning by Bank of England governor Eddie George that British economic growth would slow next year.

The Paris market advanced by 1.2 per cent, with most interest centred on shares In retailer casino.