* FTSEurofirst 300 up 0.2 percent
* Swatch climbs, buys Harry Winston jewellery arm
* Saint-Gobain up, group scores firm offer for Verallia NA
* TNT Express plunges, UPS says to withdraw bid
By Tricia Wright
LONDON, Jan 14 European shares rose on Monday,
with merger and acquisition news helping them build on gains
made since the start of the year as investors awaited another
round of corporate earnings reports.
Swiss luxury firm Swatch Group added 3.7 percent,
buoyed by news it is buying the luxury jewellery arm of Canada's
Harry Winston in a $750 million cash deal to expand into
high-end bracelets, rings and necklaces.
Saint-Gobain gained 3.2 percent after it said it
was in talks with Ireland's Ardagh Group over a firm
bid for the French firm's Verallia North America glass packaging
But European postal service operators were under pressure
after United Parcel Service Inc said it would drop its
5.2 billion euro ($7 billion) bid for peer TNT Express
on the expectation of a European Commission veto.
Shares in the Dutch delivery firm plunging 41 percent.
The FTSEurofirst 300 was up 0.2 percent at 1,166.11
by 0949 GMT, just shy of a two-year high after rising almost 3
percent during 2013.
The corporate earnings season would likely remain the main
driver of market sentiment, Craig Erlam, market strategist at
"With earnings expectations so low for the fourth quarter,
it's difficult to see where any downside is going to come from.
As a result, I expect European markets to continue to rally this
week," he said.
The banking sector will fall under the spotlight this week,
with JPMorgan and Goldman Sachs among firms set
Comments from a top Federal Reserve official also brightened
the mood on Monday. Charles Evans said the U.S. economy should
grow 2.5 percent in 2013, improving to 3.5 percent growth in
2014, and the unemployment rate would be 7.4 percent this year,
easing to about 7 percent in 2014.
Heavyweight mining stocks rose, led by Eurasian
Natural Resources, up 2.5 percent, with traders citing
a Credit Suisse recommendation upgrade to "outperform" from
"neutral" as the catalyst.
Upbeat broker comment also lifted Cap Gemini. The
French IT services group added 3.8 percent, with traders
pointing to Goldman Sachs' upgrade to its "Conviction Buy" list
in a European technology review.
Goldman removed mid-cap British chip designer Imagination
Technologies from the list. Its stock shed 2.8 percent.
British software firm Sage Group, meanwhile, fell
1.7 percent as Barclays cut its rating to "underweight" from
French energy firm EDF added 4.4 percent after it
reached a deal with the government over a tax levy shortfall.
The euro zone's blue-chip Euro STOXX 50 rose
13.69 points, or 0.5 percent, to 2,731.48, having hit a fresh
five and a half month high in earlier trade on Monday.
"It appears to be breaking out of its trading range for this
year... I am positive at the moment; we're targeting the 2,749
area," Barclays Capital's chief European technical strategist
Phil Roberts said.
Goldman Sachs equity strategists, meanwhile, have a relative
"underweight" position on European equities on a 12-month basis,
arguing that European shares may continue to be impacted by the
region's sovereign debt crisis. They are "overweight" on
equities at a global level over that period.
"We doubt that Europe will keep pace with the Asian
markets," Goldman Sachs chief global equity strategist Peter
Oppenheimer said at a presentation in London.