* STOXX, euro zone blue chips gain
* Richemont lower after profit miss
* Drillisch, Havas rally after bids
* European equity funds see record inflows
* Credit Suisse cuts Spanish stocks to underperform
* Greek stocks snap historic winning streak
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By Danilo Masoni and Helen Reid
LONDON/MILAN, May 12 European shares enjoyed a
third straight week of gains on Friday, lifted by dealmaking
among telecoms and strong company trading updates, as flows into
European equities reached record levels.
Results in Europe have been surprisingly strong with 67
percent of companies beating earnings expectations.
Combined with easing political worries that have attracted a
wave of capital, especially from the United States, strong
earnings have helped the pan-European STOXX 600 hit
21-month highs earlier in the week.
European equity funds pulled in record flows in the week
following the second-round of the French presidential election,
with more than $6 billion pumped into the region while U.S.
equity funds had $2 billion of outflows, according to Citi and
fund tracker EPFR Global.
"U.S. investors have seen the economic data, they look at
the euro and see it's an undervalued currency, and they have
started to move some money out of the U.S. and into Europe,"
said Stephen Mitchell, head of global equities at Jupiter,
adding American investors are feeling 'fatigue' about their home
The STOXX and euro zone blue chips were
both up 0.2 percent, while the UK's FTSE 100 added 0.5
percent, boosted by a 9 percent surge in AstraZeneca
following positive trial results from a key immunotherapy drug.
Gains in the British drugmaker helped lift Europe's
healthcare index up 1.8 percent, making it one of the
biggest contributors to the STOXX.
Fresh dealmaking activity in telecoms drove the sector
up 2.4 percent to its highest level in 11 months.
United Internet surged 14 percent after saying
that it planned to buy a majority stake in mobile operator
Drillisch in a deal which will boost competition at
the low end of the crowded German telecoms market.
Drillisch soared above the bid price. Alpha Trading
portfolio manager Stefan De Schutter said that reflected the
fact that Drillisch will pay a dividend before the bid as well
as the chance that United may increase the stake in the future.
German telecoms Deutsche Telekom and Telefonica
Deutschland rose 4.9 and 6 percent, respectively.
Petrofac led European fallers, plummeting 14 percent
after the oil services firm said its chief executive and chief
operating officer had been questioned by Britain's Serious Fraud
Office in connection with an ongoing investigation into
Cartier owner Richemont fell 5 percent after saying
the trading environment would stay volatile after net profit
fell below expectations but sales growth picked up towards the
end of its fiscal year to March.
Havas soared 9.2 percent after Vivendi announced
an offer to buy Group Bollore's 60 percent stake in
the French advertising group in a $2.6 billion deal.
Schibsted rose 7.5 percent after revenues at the
Norwegian media firm kept its guidance and posted revenues above
Italian lender Banco BPM rallied 6.2 percent after
its quarterly net profit came in well above expectations.
Banco Popular fell 3 percent after the struggling
Spanish lender denied it was urgently seeking to be taken over.
The stock was the biggest faller in Madrid on
Thursday when the IBEX suffered its biggest one-day loss in six
Credit Suisse downgraded Spanish equities to underperform on
Friday, citing fading earnings momentum and recommending clients
Despite suffering its worst week since November, Spain's
IBEX kept its leading position among major European
benchmarks this year, with year-to-date gains of 16 percent.
Meanwhile in Athens, the benchmark of Greek stocks
fell 1 percent, snapping a 13-day winning streak which was its
longest since 1991.
Cyber attacks in Spain and the UK targeting companies and
hospitals emerged late on Friday. Breaches in
cyber-security have wiped billions off companies' share prices
since 2013, a report found last month.
(Reporting by Danilo Masoni; Editing by Elaine Hardcastle)