Frankfurt closed on an upbeat note, adding 92.00 at 5,219.43 on the Xetra DAX index for a five-day gain of 4 per cent. Banks were active with a Dutch takeover bid sending BHF Bank steeply ahead and rumours of an offer from Commerzbank for BfG Bank lifting Commerzbank.
BHF surged €10.14 or 30 per cent to €44.34 after ING of the Netherlands stepped in with a takeover offer. Commerzbank ended €2.50 better at €33.11 on talk that it was poised to swoop on BfG Bank.
Insurers moved ahead strongly in the wake of good profits news from the global sector. Allianz gained €10.80 at €259.40 and Munich Re added €1.18 at €179.90.
Paris rose 68.62 to 4,434.28 on the CAC-40 index with a strong performance by France Telecom supplying much of the momentum. The market heavyweight surged 6.4 per cent, the day's best performance, adding €4 at €67 after several industry analysts turned positive on the stock.
Insurer Axa continued to gain ground, adding €4.80 to €114.20 following strong results from British offshoot Sun Life earlier in the week.
Amsterdam gained 11.13 to 564.44 on the AEX index after another strong performance from financials. ING added €2.75 at €50.40 on news that the financial giant was intent on buying BHF Bank of Germany. ABN Amro added €1 at €20.80 and Fortis €1.05 at €29.30. Foods group Numinco rose €2.60 or 7 per cent to €39.60 following better than expected first-half results.
Zurich moved smartly ahead, given a lift by the performances of Roche, Novartis and Zurich Allied. The SMI index closed up 128.3 or 1.9 per cent to 6,934.4.
Milan swept into positive territory in the wake of the US inflation data and the Mibtel index closed 241 higher at 23,183. HDP, the holding company, was a firm spot throughout the session on suggestions that Gemina might raise its stake.
The HDP shares rose 5.8 per cent to 57 cents, also supported by a report that the Washington-based investment firm, Carlyle Group, might be considering a bid.
Stockholm saw a sharp fall in Electrolux, the world's largest maker of household appliances, after the company posted first-half profits in line with expectations, but the general index put on 22.87 to 3,824.18.
