Continuing worries about interest rates around the world sent European equities markets lower on Tuesday. The FTSE Eurofirst 300 dropped 0.7 percent to 1,269.90.

The oil sector saw substantial gains, however, as crude oil prices began to rise again. Eni gained 2.1 percent to €22.53, while OMV added 3.7 percent to €44.40 and Statoil was up 4.8 percent to NKr175.

Utilities were down during the day. Suez was down 0.4 percent to €30.30 even though UBS raised its recommendation on the company from “neutral” to “buy”. Gaz de France, meanwhile, was 0.6 percent lower to €25.55. The French government has postponed the bill that would allow the merger between Suez and Gaz de France until September. Meanwhile Enel, the Italian utility, dropped by 1.1 percent to €6.575. Some analysts believe that Enel is considering a bid for Suez.

Shipper AP Möller-Maersk B shares were the biggest decliners of the day, falling 9.3 percent to DKr43,000 on a reduced profits forecast for 2006 on disappointing growth in its container shipping unit. German tourist and shipping group Tui dropped 3.6 percent to €14.96 despite maintaining its full-year predictions for its container division.

European tire manufacturers were down after Japanese tire maker Bridgestone cut its profits forecast for this year by 35 percent because the cost of raw materials has risen. Michelin declined by 2.6 percent to €45.82, while Continental fell 2.9 percent to €77.51.

In Europe on Tuesday the FTSE Eurofirst 300 hit another four and a half year high to close 0.1 percent higher to 1,373.56.

The gain came even though shares in the oil sector were down as crude oil prices dropped early in the day. Total and Eni dropped 1 percent each, to €210.90 and €23.21 respectively. Statoil declined by 2 percent to NKr171.50.

Stock exchange operators were down as well as bid rumors began to subside. German exchange Deutsche Borse was down 2.4 percent on the day to €114.43, while Euronext dropped by 1.3 percent to €61.55.

The banking sector was mixed on the day. ABN Amro was up on reports that BBVA was thinking of bidding for the Dutch bank, gaining 2.7 percent to €25.68 after going as high as €25.78 earlier in the day. BBVA, however, dropped 0.8 percent to €17.

Banco Santander Central Hispano declined by 0.1 percent to €12.07 on talk that it might be looking for more foreign purchases after recently buying a UK mortgage lender. Smaller Spanish banks were up, however, with Banco Popular gaining 4.3 percent to €12.52 and Bankinter adding 0.5 percent to €57.10.

Icelandic banks were down on the day after Danske Bank issued a prediction that the economy there is poised to enter a recession. Kaupthing dropped 3.9 percent to IKr878, while Landsbanki declined by 4.3 percent to IKr26.50 and Glitnir fell 4.2 percent to IKr18.20.

In Europe on Monday, the FTSE Eurofirst 300 finished the day up 0.1 percent at 1,321.65, largely on activity within the banking sector.

BNP Paribas initiated a takeover bid for Banca Nazionale del Lavoro, Italy’s sixth largest bank. The bid, worth €9 billion, spurred large gains in the Italian banking sector. Capitalia was up 7.6 percent to €5.74. Banca Popolare di Milano gained 6.9 percent to €10.57. Mediobanca advanced 4 percent to €16.24. Banca Intesa was up 3.3 percent to €4.90. BNL, however, fell 2.4 percent to €2.89.

In other fallout from the announcement from BNP, BBVA lost 1.2 percent to €16.22. BBVA will sell its 14.9 percent stake in BNL as part of the deal. Elsewhere in the banking sector, Societe Generale gained 0.5 percent on the day to €109.90, but Credit Agricole fell 0.1 percent to €29.05.

Takeover rumors also affected the oil sector as Repsol gained 4.2 percent to €23.18 on reports out of Spain that BP and Italian oil company Eni are thinking about entering takeover bids for Repsol, which is seen as vulnerable after the expiration of Spanish government protection of the company from hostile takeover. Eni gained 0.8 percent on the day to €24.60. Elsewhere in the oil sector, Austrian company OMV gained 6.4 percent, while Norwegian firms Statoil and Norsk Hydro were both up. Statoil gained 3.4 percent to NKr184.00 while Norsk Hydro advanced 1.9 percent to NKr815.00.

In the biotech sector, Swiss company Serono posted disappointing profits and revenues growth in the fourth quarter, opening it to takeover speculation and sending the company’s shares down 0.1 percent on the day to SFr958.50. GlaxoSmithKline has been seen as a likely party to attempt a takeover, but it has been reported to be unwilling to pay what analysts say would be an adequate per-share price. Other possible bidders for Serono are thought to be Novartis and Johnson & Johnson.