Relentless bid and merger speculation and some encouraging corporate results helped push European stocks to fresh six-and-a-half year highs this week.
The FTSE Eurofirst 300 index rose 1.3 per cent over the five days to 1,580.02, its highest since December 2000.
The banking sector continued to attract plenty of speculative interest with Société Générale the star performer as renewed talk of a possible bid from Italy's UniCredit did the rounds.
The speculation intensified Friday as several media reports claimed the pair were already in merger talks.
UniCredit bought Germany's HVB Group in 2005 and has since indicated it might be interested in further acquisitions.
Most analysts took the view that a tie-up with SocGen would make sense but cautioned that, given the cross-border nature of such a deal, any move was unlikely to be imminent because of the forthcoming French elections.
SocGen shares jumped 7.7 per cent to EU156.09 Friday and were up nearly 16 per cent over the week. UniCredit rose 2.9 per cent to EU7.47 over the five-day period.
BNP Paribas, meanwhile, moved higher on talk that it might launch a counterbid for its domestic rival, although some analysts argued that such a deal might face stiff regulatory hurdles.
BNP shares rose 3.9 per cent to EU86.45 Friday for a weekly gain of 6.7 per cent.
There was also a fresh burst of consolidation talk among the Spanish utilities.
Iberdrola, which is in the process of acquiring Scottish Power, rose 6.3 per cent over the week to EU38.43 while Gas Natural rose 4.3 per cent to EU38.30.
Sulzer rose 4.1 per cent Friday to SFr1,800 after nearly 20 per cent of the company's shares changed hands, prompting talk of an imminent bid for the Swiss engineering group. Victory, the Austrian investment company, was rumoured to be a possible bidder.
Vallourec, the steel tubing maker, rose 4.5 per cent to EU207 amid persistent talk that it could be a target for steelmaker Arcelor Mittal.
However, French construction group Eiffage fell 4.3 per cent to EU107.01 after its biggest shareholder, Spain's Sacyr Vallehermoso, launched an all-paper offer for the company.
The bid followed a tempestuous meeting of Eiffage shareholders at which an attempt by Sacyr to gain board representation was blocked. Sacyr shares fell 3.4 per cent to EU45.03.
Telecom Italia shed 0.8 per cent to EU2.38 after AT&T withdrew from negotiations over buying a stake.
On the results front, impressive figures from Nokia lifted the Finnish mobile phone maker 5.3 per cent to EU18.48. Also on the rise after encouraging figures were ASML (NASDAQ:ASML), up 7.6 per cent to EU20.44, and Philips Electronics, 6.4 per cent firmer at EU31.22.
Siemens (NYSE:SI) climbed 4.2 per cent to EU90.35 Friday amid hopes that the resignation of the company's chairman might herald the start of a better period for the scandal-ridden company.
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