European indexes ended higher Friday, with deal-related gains in shares of German utility RWE and French bank Societe Generale offsetting weak earnings from banking group Fortis. The German DAX Xetra 30 index closed up 0.9 percent at 7,479.34 and the French CAC-40 index added 0.6 percent at 6,050.63. London stocks rebounded from early weakness as takeover fever once more gripped the mining sector, and the U.K.'s FTSE 100 index rose 0.6 percent at 6,565.70, according to AP. Shares of Rio Tinto led miners higher, rebounding 3.2 percent amid ongoing speculation that it could be in line for a bid from BHP Billiton. BHP Billiton shares rose 1.5 percent. That helped lift others in the sector, with Xstrata shares up 2.2 percent, Antofagasta advancing 2.2 percent and Anglo-American increasing 2.9 percent. U.S. shares opened in positive territory, following upbeat news on wholesale inflation. Both the U.S. and the European equity markets have gained strongly in recent weeks, with the blue-chip Dow Jones Industrial Average breaking through 13,000 for the first time and the European markets trading around 6 1/2-year highs. Peter Dixon at Commerzbank noted that equity markets have had a lot of support from merger-and-acquisition moves, but investors are starting to wonder how long that can continue. Deal hopes boosted utility shares, with RWE up 6 percent after German radio station SWR reported that France's EdF plans to buy it. EdF's shares rose 0.6 percent in Paris, while Scottish & Southern rose 1.8 percent and International Power rose 1.1 percent in London. French bank Societe Generale rose 4.7 percent following media reports relating comments made by Chairman Daniel Bouton. He reportedly said at a meeting with unions earlier this week that the bank is a target for eight different groups. However, shares of French builder Kaufman & Broad fell 3.6 percent after U.S.-based home builder KB Home said it has received a takeover offer for its controlling stake of the French group valued at US$788 million (¤584 million). Fortis, the Belgian-Dutch bank and insurer that's vying for part of ABN Amro, dropped 1.9 percent as it reported a 12 percent quarterly profit decline, which it blamed on a hedge that didn't qualify for accounting treatment. Alcatel-Lucent's shares managed to gain 2.2 percent after the world's largest maker of telecommunications equipment flagged better days ahead, saying it expects revenue to grow 10 percent sequentially in the second quarter. Credit Suisse analysts upgraded the stock to outperform from neutral, citing improved visibility and potential incremental cost savings. In Stockholm shares of truck maker Volvo rose nearly 11 percent after it reported a 5.7 percent slip in profit, but said it sees demand in the market picking up to normal levels by 2008. -- SPA
