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European markets post strong gains on takeover talks

Takeover speculation, positive broker comments and a pleasant surprise in US inflation figures helped European markets post a second day of strong gains on Friday.

In London the FTSE 100 index gained 1.24 percent to close at 6,732.40 points, its highest for five years, while in Paris the CAC 40 added 0.96 percent to finish at 6,105.28 and in Frankfurt the DAX jumped by 2.3 percent to reach 8,030.64.

The DJ Euro STOXX50 index of leading eurozone shares increased by 1.41 percent to 4,548.22 points.

Foreign influences

Across the Atlantic US stocks surged in late morning trade, extending gains from a two-day rally, as an eagerly-awaited inflation report revealed prices largely in check excluding food and energy costs.

Japanese share prices rebounded for a second straight day as the yen slid to fresh lows against the dollar, handing a boost to exporters, dealers said.

In London, the share price of J Sainsbury surged as high as ?5.99 after Qatari investment fund Delta Two increased its shareholding in Britain's third biggest supermarket chain to 25 percent.

The stock later stood at ?5.90, an increase of 4.42 percent from Thursday's close.

Takeover speculation

In Frankfurt on Friday, Deutsche Borse led the risers, climbing 5.05 percent to 88.99 euros on market talk that the operator is interested in the New York Mercantile Exchange, which is the world's biggest oil exchange.

In Paris, shares in aerospace and defense group EADS gained 2.65 percent to 24.05 euros, encouraged by words of support from Prime Minister Francois Fillon and by analysts optimism ahead of next week's Paris air show at Le Bourget.

Elsewhere in Europe, Amsterdam's AEX share index added 1.20 percent to 551.91 points, the Swiss SMI index rose by 1.11 percent to 9,395.75 points, in Milan the SP/MIB gained 1.18 percent to 43,099 points, Madrid's IBEX-35 was up by 1.15 percent at 15,252.1 and in Brussels the BEL-20 closed 0.89 percent higher at 4,681.67 points.
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