LONDON, July 26 (Reuters) - Fresh signs of increased mergers and acquisition activity pushed European shares back up towards their highest level in nearly two-months on Friday, with some traders seeing more gradual gains on markets in the near-term.
The pan-European FTSEurofirst 300 index was up by 0.5 percent at 1,215.21 points by 0705 GMT, while the euro zone's blue-chip Euro STOXX 50 index was up by 0.7 percent at 2,758.91 points.
Andreas Clenow, hedge fund trader and principal of Zurich-based ACIES Asset Management, said he was putting on 'long' positions to bet on further gains for European equity markets.
"European equity markets may not be as strong as the U.S., but everything looks pretty healthy to me. Things are slowly moving up," he said.
Another Paris-based trader said signs of merger and acquisition activity - as evidenced by French group Vivendi's deal to sell 85 percent of its stake video games maker Activision - would further support to stock markets.