European exchanges posted strong gains on Friday, hitting multi-year highs in London, Paris and Frankfurt as investors welcomed news of a mammoth take-over bid in the steel sector.
The London FTSE 100 index shot up 1.12 percent to close at 5,786.8, its best reading in four-and-a-half years on news that Mittal Steel, the world's largest steel producer, had launched a hostile bid for European rival Arcelor for US$22.7 billion.
In Paris the CAC 40 rose 1.64 percent to 4,956.60, its highest level since the summer of 2001, while in Frankfurt the DAX finished with a gain of 1.78 percent at 5,647.42, a reading not seen since August 2001.
The Euro STOXX 50 index of leading eurozone shares ended the week at 3,685.48, up 1.21 percent from Thursday.
On the currency market the US dollar rebounded against the euro despite news that the US economy expanded at an annual rate of 1.1 percent in the fourth quarter last year, well below expectations.
The euro was at US$1.2125 in late trade, down from US$1.2205 late on Thursday in New York.
Wall Street stocks rallied as the weak report on US economic growth boosted hopes for an easier interest rate policy from the US Federal Reserve and investors reacted to upbeat earnings news.
The slowdown in real GDP from 4.1 percent in the third quarter was largely due to weak auto sales, slower business investment, a rise in imports and a large drop in federal spending.
"This news should be taken as a sign that growth will slow in 2006, but it should not be taken as a sign of a drastic change in economic trends," Dick Green at Briefing.com said.
Other analysts agreed that the economy remained on firm footing and that the weak figure was skewed by unusual trends in auto sales and other temporary factors.
In London port operator Peninsula and Oriental jumped 4.79 percent to £5.47 (US$99.70) after Thursday's announcement that it had accepted a takeover offer from DP World of Dubai at £5.20, or 3.9 billion euros (US$4.7 billion).
Steel maker Corus jumped 14.7 percent to £0.72 on the back of the Mittal bid for Arcelor.
In the mining sector Anglo American added 3.11 percent to end the week at £21.87, while BHP Billiton rose 1.20 percent to £10.52.
In Paris Arcelor soared 28.44 percent to 28.54 euros on the Mittal bid.
Oil group Total added 2.54 percent to reach 226 euros on rising crude prices, which also helped oil services giant Schlumberger gain 6.15 percent to finish at 104.50 euros.
Retailer Casino fell 8.43 percent to 49.77 on disappointing projections for its operating results for last year.
In Frankfurt steel producer Thyssenkrupp added 8.07 percent to end the session at 21.95 euros on renewed chances it will be able to acquire Canadian competitor Dofasco.
Elsewhere there were gains of 1.22 percent to 11,023.2 on the IBEX-35 in Madrid, 0.90 percent to 3,760.38 on the BEL 20 in Brussels, 0.39 percent to 7,779.43 on the Swiss Market Index, 0.59 percent to 36,701 on the SP/MIB in Milan and 1.36 percent to 449.67 on the AEX in Amsterdam.
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