The FTSE Eurofirst 300 closed Friday at its highest level in five and a half years, adding 0.6 percent on the session and 2.8 percent higher on the week at 1,489.09. The Eurofirst has gone up 16.7 percent since the beginning of the year.

Banks were big gainers during the week. Nordea added 6.3 percent to SKr106.2 when Sampo of Finalnd was reported to have added to its stake in Swedish bank. Sampo gained 4.2 percent during the week to €20.38. ING was 6.8 percent higher to €33.68 and ABN Amro was up 7 percent to €24.30 on rumors that the two are in talks over a bid from ING.

Meanwhile, Raiffeisen International added 9.1 percent over the week on investor enthusiasm about its presence in central and eastern European markets. Citigroup began coverage of the Austrian bank with a “buy” recommendation, citing the potential value of Raiffeisen’s holdings in Russia and the Ukraine.

The retail sector saw gains, as well. Inditex, owner of the Zara fashion chain, gained 8 percent to €41.70 on the week on better than expected results in the third quarter. Ahold was 9.7 percent higher to €8.25 on rumors of a coming bid from private equity group KKR and on positive comments from UBS.

The FTSE Eurofirst 300 ended the day at a five-year high as it closed 0.6 percent higher to 1,480.76. The gains came as analysts at Standard & Poor’s said that the active year in mergers and acquisitions could be topped by next year’s activity.

The airlines sector saw gains as investors looked for more consolidation in the sector after the recent record amount paid for the takeover of Qantas of Australia. Iberia was up 1.1 percent to €2.81, while Lufthansa added 1.3 percent to €20.87 and SAS gained 1.4 percent to SKr108.00.

In the pharmaceuticals sector, Novo Nordisk added 2.5 percent to DKr468 on an upgrade from “hold” to “buy” from Citigroup. The broker also raised Novo’s target share price from DKr445 to DKr525, citing the positioning of the drug maker and healthcare group to capture more business as more and more people become diabetic. It also said that Novo’s growth potential from its anti-obesity drug had not yet been priced into to its share value.

Also in the healthcare sector, Nestle and Novartis both benefited from Nestle’s agreement to purchase Novartis’ medical nutrition unit for $2.5 billion. The deal was said to position Nestle second only to Numico in providing special foods for patients. Nestle added 1.5 percent on the news, to SFr436, while Novartis gained 1.8 percent to SFr71.35 and Numico was up 2.9 percent to €40.13.

In the automobile manufacturing sector, Porsche was 2 percent higher to €955.00 when HVB increased its target share price from €995 to €1,104. Meanwhile, Volkswagen was 0.2 percent lower to €84.00.

Prices on US Treasury bonds dropped and yields rose on Thursday after unemployment claims were reported to be down last week and as import prices were up. Prices on imported goods were up 0.2 percent in November, the first rise in three months. Meanwhile, new jobless claims were down by 20,000 in the week ending December 9, a drop that was fivefold higher than had been expected.

At midday in New York, two-year Treasury bonds were 1.3 basis points higher to 4.717 percent, while ten-year issues had added 0.3 basis points to a yield of 4.580.

Yields were also up on Eurozone bonds after two European Central Bank officials made comments that were read to mean that more interest rate hikes are soon to come. The two-year Schatz added 2.1 basis points to 3.781,while the ten-year Bund gained 2.4 basis pints to yield 3.777 percent.

In the UK, strong retail sales data lent more fuel to the fire of rate hike expectations and sent prices on gilts down for the seventh session in a row. The two-year gilt added 3.5 basis points to yield 5.108 percent, while the ten-year gilt was 6.1 basis points higher to 4.688 percent.

In Japan, meanwhile, ten-year government bonds added 1.5 basis points to a yield of 1.630 percent. Shorter-dated bonds, however, dropped 0.5 basis points, to yield 0.795 percent.

European equities markets were higher on Wednesday as the banking sector was mixed but mostly higher. The FTSE Eurofirst 300 closed at 1,471.57, a gain of 0.6 percent and just below a five-year high. In Germany, meanwhile, the Xetra Dax ended the session at 6,520.77, its highest closing level since February 2001.

French publisher Lagardere added 2.5 percent to €59.10 on an upgrade from “neutral” to “buy” from UBS, which said it sees the possibility of growth by the publisher. Elsewhere in France, utility EDF added 4.8 percent to €55.55, a record high share price, on hopes that tariffs will go up soon. EDF’s shares have risen more than 15 percent since the end of November. On the other hand, French airplane engine manufacturer Safran dropped 6 percent to €15.95 after announcing that it was investigating accounting problems in its defense security unit and dropping its full-year operating profit margin target to 4 percent.

Raiffeisen International was 6.1 percent higher to €107.13 on growth potential in central and eastern Europe, where the Austrian bank has extensive holdings. In addition, Citigroup began coverage of Raiffeisen with a “buy” rating and a target share price of €124. Among other Austrian banks, Erste Bank added 0.5 percent to €57.63. Erste also has exposure to eastern Europe.

Elsewhere in the sector, ABN Amro was 3 percent higher to €24.10 on the news that it has completed its purchase of Italian bank Antonveneta. There were also rumors that ING is interested in bidding for ABN, its larger Dutch rival. ING gained 2.2 percent to €33.16.

The FTSE Eurofirst 300 added 0.4 percent on Tuesday to close at 1,462.53 as merger rumors continued in the banking sector.

There were gains in the retail sector. Carrefour added 2 percent to €47.22 after Tesco decided to buy the other half of China-based supermarket chain Hymall. The move underscored the value of the French retailer’s interests in that Asian nation. Ahold was 3.9 percent higher to €7.81 on speculation about the Dutch retailer’s restructuring after it agreed to sell part of its interests in the US last month. Some hedge fund investors are urging Ahold to completely divest itself of US holdings.

In the banking sector, Nordea added 6.7 percent to SKr107 after it became known that Sampo of Finland purchased 12.8 million more shares of the bank in November. Bids rumors circulated although some analysts said that Sampo was simply looking for a better position before the Swedish government sells its stake in Nordea. Sampo added 3.1 percent to €20.20 on the speculation, while Svenska Handelsbanken added 0.5 percent to SKr192.50 and SEB gained 2.6 percent to SKr213.00.

Stock exchange operator Deutsche Borse dropped 2.1 percent to €134.22 on a downgrade from “add” to “hold” from West LB, which cited valuation issues as a reason for its move.

In the electronics sector, meanwhile, Philips Electronics was 0.7 percent lower to €27.72 after its joint venture in South Korea, LG.Philips LCD, dropped almost 8 percent after being looked at by authorities concerning allegations of price fixing.

The US Federal Reserve held interest rates at 5.25 percent on Tuesday, as expected. The statement that accompanied the decision said that economic growth in the United States is expected to moderate, citing a substantial cooling of the housing market, but that some risk of inflation remains.

Before the interest rate announcement came, prices on US Treasury bonds were slightly higher on the news that the US trade deficit had been substantially reduced in October, a possible indication that fourth-quarter economic growth could turn out to be stronger than predicted. At midday in New York, two-year Treasury bond yields were at 4.658 percent, a drop of 1.3 basis points, while ten-year bonds were 0.6 basis points lower to 4.516 percent.

In the UK, gilts prices were lower and yields higher after new data showed that consumer prices in November were up 0.3 percent and that they had risen 2.7 percent so far this year, providing a surprise gain in UK inflation. Two-year gilts added 4 basis points to 5.042 percent, while ten-year gilts were 1.6 basis points higher to 4.612 percent.

Yields on Eurozone bonds were mixed. The ZEW index of German sentiment was at -19 in December, up from November’s reading of -28.5 and better than the predicted -25. The new figures prompted only a small sell-off as investors waited for the US interest rate decision. The two-year Schatz was up 0.3 basis points to 3.740 percent, while the ten-year bund dropped 0.8 basis points to 3.731.

In Japan, a sale of ¥2,000 billion in five-year government bonds was a success, with demand at nearly three times the supply. Five-year yields were down by 2.5 basis points to 1.215 percent, while two-year bonds were 2 basis points lower to 0.815 percent.

The FTSE Eurofirst 300 was up on Monday on gains in the steel sector as it seemed that there could be a bidding war for Anglo-Dutch steel maker Corus that could translate into wider consolidation in the sector. The Eurofirst was up 0.6 percent to 1,457.09.

The steel sector was not the only one that gained on bids and rumors of bids, however. Among stock exchanges, Deutsche Borse was 3.1 percent higher to €137.10 on a meager hope that Euronext’s tie-up with NYSE Group might not be as firmly settled as had been thought, making room for a bid from the German exchange operator. Euronext added 2.9 percent on the session ahead of a December 19 vote by shareholders on the merger with NYSE.

Bids rumors also helped Continental after General Capital Group would not rule out another bid after a failed attempt to buy the German tire maker earlier in the year. Continental was up 2.6 percent to €89. 69.

With prospects shaping up for a bidding war between CSN of Brazil and Tata of India, Corus added 5.4 percent to €7.80 as analysts said that while the Tata bid is more favorable from an employee point of view, Corus is obligated to act in the interests of its shareholders, who would benefit more from acceptance of the CSN bid. CSN is currently offering 515p per share, while Tata’s bid stands at 500p per share, raised on Sunday from a previous 455p bid. In Mumbai, Tata dropped 6 percent on the increased bid.

Elsewhere in the sector, ThyssenKrupp gained 1.5 percent to €32.13 after its target share price was revised upward by Goldman Sachs. Salzgitter was 1.6 percent higher to €97.22, Mittal Steel added 2.5 percent to €32.80, and Acerinox of Spain was up 2.7 percent to €21.77.

The FTSE Eurofirst 300 ended the day and the week higher on Friday, closing at 1,449.14. The Eurofirst added 0.1 percent on the session and 2 percent higher for the week.

In the pharmaceuticals sector, bids news sent both Schwarz Pharma of German and UCB of Belgium higher when the Schwarz family accepted a €4.4 billion offer, including both cash and shares, for the company in which they hold a 59.2 percent stake. Schwarz added 4.7 percent during the week to €95.99, while UCB was 9.2 percent highr to €52.25.

Bids news also brought gains to the tobacco sector after UK company Gallaher said it had received an offer which many think came from Japan Tobacco. Despite a decline on Friday after a downgrade from Cazenove, Gallaher was 24.2 percent higher over the week to £11.72. With investors hoping for more consolidation in the sector, French-Spanish tobacco group Altadis ended the week with a gain of 8.8 percent to €40.5.

Banks also had a good week. Irish banks were led higher by Anglo Irish Bank after it said that its pre-tax profits were better than had been expected and after UBS upped its target share price. Anglo Irish added 8.4 percent to €15.44, while Allied Irish Banks added 3.8 percent over the week to €21.49 even after it didn’t raise its growth guidance. Bank of Ireland, meanwhile, was 3.7 percent higher to €16.65.

Austrian banks also did well. Erste Bank added 4.2 percent to €57.78 after ING initiated coverage with a “buy” recommendation. Raiffeisen International was 6.8 percent higher to €99.90. Both banks do substantial business in eastern Europe.

New mergers and acquisitions rumors helped send the FTSE Eurofirst 300 higher on Thursday. The index added 0.5 percent to 1,447.86.

In the insurance sector, Swiss Life was 2.1 percent higher to SFr306 after it was rumored that Generali of Italy and Allianz of Germany might be ready to enter a bidding war over the Swiss insurer. Allianz was 0.7 percent higher to €149.61, while Generali, also a possible takeover target, gained 4 percent to €34.55.

French-Spanish tobacco group Altadis was up 7 percent to €40.37 after the confirmation of a bid for the UK company Gallaher raised hopes of more consolidation in the sector. JP Morgan commented that Altadis was a much more attractive target than Gallaher.

In the steel sector, ThyssenKrupp added 3.7 percent to €31.86 on positive broker comments. Deutsche Bank raised the steel maker’s target share price from €35 to €36, while West LB upped its target price from €32 to €34 and Commerzbank raised its earnings estimate for the 2006-2007 fiscal year by 16 percent.

Among telecommunications companies, Alcatel-Lucent gained 2.6 percent to €10.30 upon being added to Goldman Sachs’ “conviction buy” list. On the other hand, Dresdner Kleinwort retained its “sell” rating and target share price of €8, noting that Alcatel-Lucent isn’t a major manufacturer of mobile devices, unlike its rivals, Nokia and Ericsson.

The European Central Bank raised interest rates on Thursday for the sixth time since last December. The rate hike, which was expected, sent Eurozone internet rates up by 25 basis points to 3.5 percent.

In the remarks which came along with the announcement, ECB president Jean-Claude Trichet said that inflation remains a danger. Mr Trichet’s comments came even though inflation remained within the ECB’s 2 percent target in November, at 1.8 percent.

In the UK, meanwhile, the Bank of England also fulfilled expectations by deciding to retain the present interest rate of 5 percent for the time being. Analysts were divided recently, however, on if or when another rate hike will come.

A recent Reuters poll had one-third of the 50 economists surveyed saying that rates will rise to 5.25 percent by March. The other two-thirds said they believe rates will remain at 5 percent until at least the middle of 2007. Since that poll was taken, however, new data on house prices have shown that average prices were up 1.7 percent in November, more than had been expected. In addition, retail sales and manufacturing reports have been lower than hoped. All this could alter the outlook for interest rates in the UK as 2007 begins.

The FTSE Eurofirst 300 was higher on Wednesday, but only by 0.9 points to 1,440.02 as investors were reluctant to do much ahead of new data on US employment, due to be released Thursday.

Banks were higher after Anglo Irish Bank said that its full-year pre-tax profits were higher than had been expected and predicted that its good performance will continue into next year. Anglo Irish was up 3.3 percent to €14.82. The announcement and forecast helped Allied Irish Banks to gain 1.7 percent to €21.67, while Bank of Ireland added 2.3 percent to €16.73.

Deutsche Post added 0.6 percent to €23.50 on positive broker comments after making presentations focusing on its DHL Express unit. Credit Suisse raised Deutsch Post’s target share price from €23.5 to €27, while Citigroup held its target share price at €21.50 but said there was a potential for valuation to rise.

In the oil sector, Norsk Hydro was 3 percent lower to NKr147.25 after it said that its production until 2010 will be lower than it previously estimated due to capacity limitations within the industry. Statoil followed Norsk down, falling 1.6 percent to NKr168.50.

Among telecommunications companies, Telecom Italia dropped 0.8 percent to €2.25 on a downgrade from “hold” to “sell” from ABN Amro, which cited operational weakness and limits on value creation.

French retailer PPR was 2.2 percent lower to €113.50 after a placement of 900,000 shares by Morgan Stanley.

Prices were down and yields higher on US Treasury bonds on new data showing that job growth in the private sector was better than expected in November. While reports from ADP Employer Services are not always an accurate gauge of non-farm payrolls, their report of 158,000 new jobs in the private sector, substantially higher than the 110,000 rise in non-farm new jobs expected when the Labor Department reports on Friday caught the attention of investors.

At midday in New York on Wednesday, two-year Treasury bonds were 5 basis points higher to a yield of 4,570 percent, while ten-year issues had added 2.9 basis points to 4.475 percent.

In the UK, gilts were mixed ahead of a new interest rate decision by the Bank of England, due Thursday. Investors didn’t pay as much attention to a report from the UK Treasury that reduced the expected issuance of new gilts in the fiscal year that ends next April by around £500 million. While two-year gilts were 1.3 basis points lower to 4.924 percent, ten-year gilts added 1.3 basis points to a yield of 4.506 percent.

Yields on Eurozone bonds were up ahead of an expected hike in interest rates by the European Central Bank on Thursday. The two-year Schatz was 2.6 basis points higher to 3.663 percent, while the ten-year Bund gained 1.9 basis points to 3.688 percent.

In Japan, the two-year Japanese government bond added 3 basis points to a yield of 0.840 percent, while five year-yields also gained 3 basis points to 1.230 percent. The ten-year JGB held steady at 1.650 percent.

In Europe on Tuesday the FTSE Eurofirst 300 added 0.7 percent to 1,439.93, helped out by a strong start to the trading day in New York.

Stock exchanges were higher on the session. Deutsche Borse added 2.2 percent to €127.25 on an upgrade from “hold” to “add” by West LB. Even though the broker dropped its target price for Euronext while reiterating its “hold” recommendation, the pan-European exchange gained 2.3 percent to €87.30 after European regulators provisionally approved its takeover by NYSE Group.

Among airlines, Alitalia was 6.4 percent higher on an announcement from the Italian government that it will sell at least 30.1 percent of its stake in the airline. Italian law will require whoever buys the government stake to make a cash offer for the rest of the carrier.

In France, EDF gained 2.6 percent to €53.35 as it continued to reap benefits from a ruling last Friday that in practical terms meant that French rates for electricity are likely to rise.

The pharmaceuticals sector was up on news about diabetes drugs. Sanofi Aventis added 3 percent to €67.85 after it said a weight-loss drug, Acomplia, could also help in the treatment of type-2 diabetes. Meanwhile, Novo Nordisk gained 4.3 percent to DKr464.50 on its claim that a long-acting insulin, Levemir, both helped blood sugar levels in those with diabetes but also helped them lose weight.

Mergers and acquisitions rumors once again helped European equities see gains on Monday as the FTSE Eurofirst 300 added 0.6 percent to 1,429.95.

The airlines sector was mixed on the session. On an announcement by the Italian government that it will reduce its stake in Alitalia to less than 30 percent, from the 49.9 percent that it now holds, the Italian air carrier added 2.4 percent to €0.96. Air France-KLM, which recently said that it is in preliminary talks with Alitalia concerning a possible merger, dropped 0.7 percent to €30.30. Analysts for Citigroup, however, felt that it would be more likely that domestic bidders would be interested rather than foreign carriers such as Air France or Lufthansa. Lufthansa was nonetheless 2.4 percent higher to €19.95 when Morgan Stanley reaffirmed its “overweight” rating and lifted the carrier’s target share price from €18.20 to €25.

In the utilities sector, Spanish power generators were up on rumors that the government could hike electricity tariffs by 10 percent in 2007. If this turns out to be the case, it would be largest increase in the tariffs in 20 years. Endsea was 0.4 percent higher to €35.15, while Iberdrola added 1.5 percent to €33.48 and Union Fenosa gained 2.7 percent to €39.94.

Also in Spain, property group Inmocaral purchased 15 percent of builder FCC from Acciona. FCC added 3.6 percent to €75.20 and Inmocaral was 5.7 percent higher to €5.38. Acciona, which did not say how it would use the €1.53 billion it will receive for the transaction, gained 0.4 percent to €131.50. Some analysts expect that Acciona will use the money to buy more of a stake in Endsea as part of an attempt to foil Germany’s Eon from acquiring Endsea. Eon was 1.5 percent higher on the session, to €95.90.

Yields on US Treasury bonds were up at midday in New York, trying to recover from last week when yields fell to near their lowest point this year. Yields were already so low, some analysts felt, that investors barely paid attention to new data from the National Association of Realtors that showed pending home sales were down 1.7 percent in October. The two-year Treasury bond was 0.8 basis points higher at noon on Monday, to a yield of 4.537 percent, while the ten-year bond had added 0.2 basis points to 4.440 percent.

In Europe, yields were mixed as some investors took profits and anticipated a meeting later in the week by the European Central Bank, when the Bank is expected by many to raise Eurozone interest rates to 3.5 percent. The two-year Schatz saw yields drop by 1.2 basis points to 3.601 percent, but the ten-year Bund added 0.7 basis points to a yield of 3.669 percent.

Yields on UK gilts, meanwhile, were lower ahead of a Bank of England meeting this week, at which the Bank is expected to keep interest rates at 5 percent. The two-year gilt was 2.3 basis points lower to 4.903 percent, while ten-year gilts were yielding 4.467 percent, a decline of 0.5 basis points.

In Japan, the ten-year Japanese government bond yielded 1.615 percent, a gain of 0.5 basis points ahead of an auction of ¥1,900 billion in ten-year bonds.

The FTSE Eurofirst 300 was 2 percent lower over the week, closing at 1,421.17 on Friday as a strong euro hurt several sectors. One analysis said that corporate profits could be down by up to 4.4 percent next year if the euro continues to strengthen. New data showing that the US economy is slowing down also hurt European equities.

In the automobile and transport equipment sector, most stocks dropped. The exception was MAN, which added 1.1 percent to €70.71 as rumors circulated that Scania could counter bid for the German truck maker while rejecting its overtures. Scania was 0.4 percent lower to SKr473. Elsewhere among carmakers, BMW fell 3.8 percent over the week to €41.20, DaimlerChrysler dropped 4.7 percent to ¥43.41, and Renault was 5.1 percent lower to €88.35.

The pharmaceuticals sector was lower as well. Bayer only dropped 0.4 percent to €38.83, but Roche fell 3.8 percent to SFr212.3 during the week.

Cell phone maker Nokia was 6.8 percent lower over the week to €14.91 on a reduced outlook on profits and negative comments from Dresdner Kleinwort, which said that Nokia’s net income could decline as much as 20 percent in 2007. On the other hand, positive comments from Morgan Stanley helped airline Lufthansa add 1.4 percent over the week to €19.49.

The FTSE Eurofirst 300 came back from a series of losing sessions to gain 1.3 percent on Wednesday, closing at 1,443.38. It was the best percentage gain for the 300 in two months.

The car and truck manufacturing sector was instrumental in the day’s gains. Even though Porsche said its share of Volkswagen was steady at 27.4 percent, rumors - which were denied by Porsche - persisted that it is getting ready to make a bid for VW, possibly in conjunction with private equity. Porsche added 3.8 percent to €887.39, while VW gained 4.3 percent to €85.50 as almost 16 million shares changed hands. VW has added 168 percent to its share value since April 2005.

Meanwhile, German truck maker MAN was 5.2 percent higher, to €70.79 on rumors that Scania, which MAN is trying to buy, could offer a counter bid. Scania dropped 0.9 percent to SKr465. Elsewhere in the sector, DaimlerChrysler added 1 percent to €44.40, Peugeot was 1.8 percent higher to €48.01, and Fiat gained 3.1 percent to €14.31.

In the utilities sector, Iberdrola added 4.4 percent to €33.48 after its bid for Scottish Power led Merrill Lynch to reconfirm its “buy” recommendation. On the other hand, WestLB cut its targets share price for Iberdrola to €34, citing its belief that the Spanish utility is paying too much for Scottish Power.

In Europe on Tuesday, the FTSE Eurofirst 300 came back from early losses but still ended the session 0.3 percent lower to 1,425.35. The 300 was down 0.6 percent at one point on the session.

The pharmaceuticals sector was lower. Roche dropped 1.5 percent to SFr215.50 even though Bear Stears made positive comments, reaffirming its “outperform” rating and target share price of SFr280 for the Swiss drug maker. Meanwhile, Akzo Nobel was 1.7 percent lower to €41.86 after announcing that US drug company Pfizer had dropped out of a development deal with the Dutch group.

Utilities were lower as well. Finnish utility Fortum dropped 1.4 percent to €22.44 after it abandoned plans to raise electricity rates for its domestic non-commercial customers. Iberdrola issued an expected bid for Scottish Power but the offer was lower than expected, sending its shares 2.1 percent lower to €32.06. German utility RWE, up recently on bids rumors, fell 2.6 percent to €83.80.

The automobile manufacturing sector was mixed as the euro hit its highest level in almost two years in relation to the US dollar. Volkswagen and Porsche were both higher, with Porsche adding 0.3 percent to €854.55 and VW gaining 2.5 percent to €82 on rumors that Porsche was building more of a stake in VW. On the other hand, BMW and Renault each dropped 0.3 percent, to €41.72 and €91.25 respectively, while DaimlerChrysler was 0.7 percent lower to €43.96.

The FTSE Eurofirst 300 dropped 1.5 percent on Monday to close at 1,429.00. The declines was the Eurofirst’s furthest one-day fall in nearly six months.

Utilities were down after the announcement last week that the merger between Gaz de France and Suez was being delayed, as some hoped that Italian utility Enel might yet engineer a merger with Suez. Most analysts were skeptical of the possibility, and Enel dropped 1 percent to €7.59. Suez and Gaz de France were also lower, by 0.3 percent to €35.86 and by 0.6 percent to €32.27 respectively. Elsewhere in the sector, RWE dropped 0.6 percent to €86.05 even though it had gone as high as €90.81, an all-time high, earlier on rumors that Gazprom could be thinking about bidding.

Stock exchanges were also lower as investors took profits. Euronext dropped 3.4 percent to €92.25, while Deutsche Borse was 3.9 percent lower to €129.97.

The automobile manufacturing sector dropped on worries about the state of the US dollar. Volkswagen fell 1.6 percent to €80.01, while Peugeot dropped 2.5 percent to €46.78 and DaimlerChrysler was 2.8 percent lower to €44.25.

Tire makers were also lower, with Continental down 3.5 percent to €86.10 and Michelin dropping 4 percent to €65.20.

In Europe on Wednesday the FTSE Eurofirst 300 dropped 0.2 percent to 1,465.95.

Utilities fell to profit-taking and a court ruling that delayed the Suez/Gaz de France merger. Suez was 1.1 percent lower to €36.09, while Gaz de France dropped 2.5 percent to €32.36. Meanwhile Iberdrola, which is expected to bid for Scottish Power soon, fell 1.6 percent to €33.27.

The banking sector was mixed. Credit Agricole dropped 4 percent to €32.90 and earned it a broker downgrade after its third-quarter earnings report disappointed. Elsewhere in the sector, BNP Paribas added 0.2 percent to €84.20 but Societe Generale dropped 0.2 percent to €130.

Gainers on the session included the airlines sector. Lufthansa was 1.9 percent higher to €19.31, while Air France-KLM gained 3.2 percent to €32.25. The gains came after Australia’s Qantas Airways was the recipient of a takeover offer.

Stock exchanges were also higher. Euronext added 5.3 percent to €95.85 after it agreed with NYSE Group on the structure of the board of directors once the two complete their merger. Meanwhile Deutsche Borse was 6.5 percent higher to €138.13 on rumors that it will take a stake in Bulgaria’s stock exchange.

In the construction sector, French group Vinci gained 2.7 percent to €95.55 on speculation that it might be the target of a bid from private equity.