LONDON (CNNfn) - Driven by gains in the oil and pharmaceutical sectors and early strides on Wall Street, London's blue-chip index sailed to another record close Monday, climbing nearly 1.5 percent on the back of robust earnings in the U.S. corporate sector.
The FTSE All-Share index also posted a record finish, jumping 1.4 percent, to 3,010.25 as investors continued to shift out of high-growth stocks into cyclical issues.
The FTSE 100 leading index ended 94.7 points, or 1.47 percent higher, at 6,515.3, boosted by a rise in oil prices that helped prod oil stocks higher. Shell (SHEL) raced ahead 3.1 percent to 445 pence, while BP/Amoco (BPA) barreled up more than 5 percent, to close at 1,159 pence in London.
Frankfurt's electronically-traded Xetra Dax leapt more than 2 percent, taking its cue from the Dow Jones industrials' early bull run, now in its sixth day after the benchmark Wall Street index notched up its fifth successive record finish Friday.
The Dax shot up 109.38 points to 5,252.40 on a day rife with talk of takeovers in the retail and telecommunications sectors. Stocks on Zurich's SMI rose 1.17 percent, or 84 points, to 7,248.8, supported by signs of a recovery in pharmaceutical shares. Roche rose 1.5 percent to 260 francs, while Novartis advanced 32 francs to end at 2,391.
In Paris, the CAC 40 index of leading components finished up 1.82 percent, at 4,379.34, a new 1999 closing record. But the index felt pressure throughout the session from France Télécom (PFTE), which slid 5.44 percent as investors fretted the telecom heavyweight could be marginalized by a possible tie-up between two of Europe's leading phone companies.
On the telecom front, Deutsche Telekom (FDTE) admitted over the weekend it was holding alliance talks with Telecom Italia, without giving further details. On Monday, Deutsche Telekom shares slipped nearly 0.7 percent to 37.70 euros in Frankfurt as traders fretted its planned link-up with Telecom Italia could take a while to clear regulatory and other hurdles. In Milan Telecom Italia shares were suspended for the session.
France Telecom warned Monday the German-Italian phone merger could breach the terms of its European alliance with Deutsche Telekom.
German department store group Karstadt (FKAR) soared 11 percent after announcing plans to merge with catalog retailer Quelle. The company has given out few details of the deal -- Karstadt stock ended at 399 euros in Frankfurt.
In London, supermarket chain Asda (ASSD) and its suitor Kingfisher (KGF) were in the spotlight through much of the day. The two sides are fusing in a $10 billion deal , though speculation persists that other bidders for Asda could yet emerge. The merger is expected to trigger a major shake-out in the U.K. retail sector.
Kingfisher led the FTSE 100 decliners, slipping nearly 6 percent to 821.9; Asda shares gave up 2.39 percent to 199.1 pence.
There is also speculation linking Royal Bank of Scotland (RBOS) with a takeover bid for Barclays (BARC) after the latter was thrown into turmoil last week following the loss of its newly appointed chief executive. Barclays gained 2.74 percent to 1,913 pence, while Royal Bank of Scotland added 2.77 percent to 1,437.
The flurry of merger speculation in the financial sector gave a boost to bank Lloyds TSB (LLOY) and the U.K.'s largest insurer, Prudential (PRU), which rose 4.14 percent and 1.69 percent respectively in London.
In Paris, French luxury goods group LVMH (PMC) vaulted 10 percent after the company reported a 12.8 percent rise in first-quarter sales and said it was able to confirm its full-year growth target outlook. Retailer Carrefour leapt 5.47 on talk it could be a takeover target for U.S. giant Wal-Mart.
-- from staff and wire reports