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Europe: Stocks rebound as tech shares turn higher
[PARIS] European stocks rose on Monday, bouncing back from last week's losses with tech shares rallying after merger talks in the industry spurred rallies in the sector.
Shares in European technology stock Infineon rose 4.2 per cent, while its peers STMicroelectronics and ASML rose 3.6 per cent and 2.9 per cent respectively.
US tech stocks had climbed on Friday after news of Intel's talks to buy fellow chipmaker Altera in a deal likely to top US$10 billion.
Signs of merger and acquisition activity also pushed up the shares of Yoox by 10 per cent, after Yoox and Richemont's Net-a-Porter confirmed they were in talks to form an online fashion industry leader.
Corporate deals, along with new economic stimulus measures from the European Central Bank which have helped to weaken the euro on currency markets, have driven European stock markets to new highs this year.
The pan-European FTSEurofirst 300 index rose 1.2 per cent to 1,596.31 points, back near a 7-1/2 year high of 1,613.80 points reached earlier in March.
Germany's DAX also rose 1.8 per cent to 12,086.01 points, near a record high of 12,219.05 points hit in mid-March. "You don't get rich by 'shorting' this market. There's still plenty of M&A around," said Toby Campbell-Gray, head of trading at Tavira Securities.
Athens's ATG index underperformed the bigger gains elsewhere, rising 0.5 per cent, as lingering concerns over the country's economic and political situation weighed on the index.
Greece's biggest creditor Germany said the euro zone would give Athens no further financial aid until it has a more detailed list of reforms and some are enacted into law, adding to scepticism over plans presented last week.
French cement group Lafarge also underperformed, falling 1.9 per cent after two shareholders of its Swiss merger partner Holcim appeared unhappy with revised deal terms designed to placate them.
Shares in Italy's World Duty Free sank 8.4 per cent after Swiss group Dufry offered 10.25 euros a share to buy the travel retailer, below Friday's closing price. Dufry rose 8.5 per cent.
Nevertheless, investors said the broader, long-term trend remained one of European stocks continuing to push higher.
Martin Todd, co-manager of the Hermes Sourcecap European Alpha Fund, backed stocks such as Spanish airport operator Aena , Swiss bakery company Aryzta, German electronic payment company Wirecard and Telecom Italia .
Jean-Louis Cussac, head of Perceval Finance, added there were few reasons to sell out for now. "On the upside, there are no big resistance levels in sight, so the best thing to do is just to follow the trend for now," he said.