LONDON (CNNfn) - Europe's major bourses closed higher Wednesday, with mortgage lenders in London soaring on the back of merger talks while telecom and technology stocks powered gains in Paris and Frankfurt.
London's FTSE 100 index rose 55.9 points, or 0.9 percent, to 6,414.0, with mortgage bank Woolwich (WWH) soaring more than 26.7 percent after U.K. bank Barclays (BARC) said it is considering acquiring Woolwich in a deal valuing the company at $8.3 billion. Shares of Barclays fell 2.9 percent.
 In Paris, the blue-chip CAC 40 index rose 37.74 points, or 0.6 percent, to 6,570.18, with chip maker STMicroelectronics (PSTM) charging up 4.4 percent and telecom equipment maker Alcatel (PCGE) rising 3.2 percent.
Frankfurt's Xetra Dax jumped 102.90, or more than 1.4 percent, to 7,226.71, with chip maker Infineon Technologies (FIFX) up 7.5 percent and software house SAP (FSAP) climbing more than 3.3 percent.
The SMI index in Zurich slipped 0.1 percent.
The FTSE Eurotop 300 index, a basket of some of Europe's leading companies, rose 0.9 percent to 1,647.25, with its computer services sub-index and information technology component up almost 3 percent. The telecoms sub-index jumped 1.9 percent.
Wall Street was mixed at midday Wednesday. The Dow Jones industrial average fell 61.9 points, or 0.6 percent, to 10,915.99, while the Nasdaq composite index rose 31.71 points, or 0.8 percent, to 3,380.26.
In the currency market, the euro traded at 89.86 U.S. cents, down from 90.20 cents in New York late Tuesday, with many currency market watchers speculating that strong U.S. economic data could continue to weigh on the European common currency.
Banks rally in London
Mortgage banks across Britain jumped following the news of Barclays' possible bid for Woolwich. Shares of Alliance & Leicester (AL-) rose 6.2 percent and Abbey National (ANL) were up 2.6 percent.
 Shares of Reed International (REED), the British half of the Anglo-Dutch publishing company Reed Elsevier, rallied 7.4 percent after posting better-than-expected profits for the first half of the year and said it is ahead of schedule on its restructuring effort. The company also said it is mulling a bid for the U.S.-based textbook publisher Harcourt General (H: Research, Estimates), which put itself up for sale in June.
Elsewhere in British media, shares of music publisher EMI Group (EMI) rose 8.3 percent, bouncing back following Tuesday's 9 percent plunge after U.S. states filed a price-fixing lawsuit against top music publishers. Broadcaster BSkyB (BSY) rose 3.2 percent.
Among the few decliners in London was Colt Telecom (CLT), which fell 3.3 percent after announcing Tuesday that CEO Paul Chilsolm will step down.
Optical components maker Bookham Technology (BHM) slumped 5 percent after saying it will boost its capital expenditures to spur revenue growth, even as the company posted an 84 percent jump in second-quarter revenue from first-quarter levels.
Otherwise, software and technology stocks rose. Software house Sema Group (SEM) rose 5.3 percent and rival CMG (CMG) gained 4.1 percent, while Internet data carrier Energis (EGS) jumped 5.7 percent.
In Paris, tech and telecom stocks moved higher. Construction and mobile phone company Bouygues [PAR: ] rose 1.9 percent, data network operator Equant (PEQU) climbed 1.1 percent and France Telecom (PFTE) climbed 3.2 percent, while Germany's Deutsche Telekom (FDTE) climbed 2 percent in Frankfurt.
Computer consultant Cap Gemini (PCAP) rose 2.4 percent, despite posting sales that were at the low end of analysts' expectations. Cap Gemini said its first-half sales rose 5.5 percent to  4.1 billion, but posted an operating profit margin of 10 percent, topping analysts' forecasts.
Elsewhere in the "new economy" sector -- telecommunications, technology and media stocks - pay-TV company Canal Plus (PAN) rallied 1.3 percent and its parent, Vivendi (PEX), also rose 1.3 percent.
 Retailer Carrefour (PCA) led the decliners in Paris, falling 5.5 percent amid disappointment with news late Tuesday that July sales rose at a lower-than-expected pace, London and Paris dealers said. Rival Casino (PCO) lost 3.6 percent.
Germany's top index was buoyed by retailing and tech shares. Among retailers, Karstadt Quelle (FKAR) tacked almost 5 percent and Metro (FMEO) added 6.6 percent.
German auto stocks also moved ahead. Shares of BMW (FBMW) added 2.1 percent, while DaimlerChrysler (FDCX) rose 3.5 percent and Volkswagen [FSE:FVOW[ gained 3.6 percent.
Leading the decliners in Frankfurt was drug maker Schering (FSCH), which fell 3.9 percent. 
-- from staff and wire reports
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