European shares buoyed by telecom takeover talks
EUROPEAN shares edged towards five-year highs on Thursday, buoyed by merger news in the telecom sector and more broadly supported by diplomatic initiatives over Syria.
Vivendi was up 3.1pc the top FTSEurofirst 300 riser in early deals, after moving ahead with plans to spin off its struggling telecom division.
Telecom Italia and KPN both gained 1.4pc after receiving takeover approaches, less than a month after Vodafone sold its stake in a joint venture with Verizon
"Telecoms are very interesting at the moment, the sector is moving a lot, and when you have one big deal, more usually follow," Lucas Roux de Luze, sales trader TJM Partners, said, adding that a calmer outlook for Syria, was helping investors look for new opportunities in equities.
"It looks like the offer from the Russians (on placing Syria's chemical weapons under international control) is working, and while people are still very cautious as the offer has to be applied, it looks like the focus of investors is back to fundamentals in Europe."
The index showed little reaction to news that a western-backed Syrian rebel leadership council had rejected the Russian plan.
The FTSEurofirst was up 0.1pc to 1,248.33 at 0721 GMT, set for its third straight day of gains as it overcomes recent volatility over tension in the Middle East.
Hopes of growth in Europe helped the euro zone's blue-chip Euro STOXX 50 index set its highest closing level since early July 2011 on Wednesday, while the FTSEurofirst 300 traded within 0.7 percent of May's five-year high.
The gains come a week ahead of an expected scaling back of the U.S. Federal Reserve's monthly bond buying programme.
Roux de Luze said the market was pricing in between $10bn to $15bn of tapering, and could rise if the figure was lower.
"The market has now priced in some tapering, so people are very bullish now... and even if the Fed is tapering, it's a sign of growth, and we want the growth."
Among the top fallers was EDF, which dropped 2.4pc after a report that Norges IM was selling 13 million shares in the French energy company.