European stock markets hit a new 4-1/2 year high on Friday as global mining stocks rallied after miner Lonmin said it was in talks over a possible bid for the company. Telecoms gained on speculation that KPN could be a takeover target, rumours of consolidation in the UK banking sector swirled, car-makers jumped on positive news from Volkswagen and Fiat, while oil stocks rose along with higher oil prices. The FTSEurofirst 300 hit 1,345.5 points in afternoon trade, its highest level since August 2001, and ended the week unofficially 0.3 percent higher at 1,342.9. "In the short term we have a lot of cash generation, a lot of M&A activity, valuations are still okay and we have a good macro-economic background," said Charles de Boissezon, strategist at Deutsche Bank. "I can see the market continuing to grind a tad higher," he said. M&A activity in the mining sector propelled indices higher after the South African miner Lonmin, which is also listed in London, said it is in talks over a possible bid for the company but declined to name its suitor. Lonmin, the world's third-largest platinum miner, has seen its shares more than double over the past year on the back of soaring platinum prices. On Friday Lonmin's shares closed in London up 25 percent, after touching a new high of 28.60 pounds. --More 23 20 Local Time 20 20 GMT
