The FTSE Eurofirst 300 gained 0.7 percent on Monday to close at 1,269.21, helped by an announced merger in the telecommunications sector.

Nokia of Finland said it would merge its network equipment unit with that of Siemens. The announcement sent shares in Nokia up by 3.2 percent to €16.15, while Siemens added 7.2 percent to €67.36. The merger was expected to save €1.5 billion per year by 2010. While Dresdner Kleinwort Wasserstein made negative comments about the deal, including that the deal would take a long time to close, HSBC upgraded Siemens from “neutral” to “overweight” and increased the German telecom’s target share price from €76 to €81.

Also in telecoms, TeliaSonera dropped 1.8 percent to SKr39 on a downgrade from “hold” to “sell” from Citigroup.

In semiconductors, Infineon was 0.7 percent higher at €8.57, while STMicroelectronics gained 1.9 percent to €12.49 on a buy recommendation from Morgan Stanley.

Ferrovial added 4.2 percent to €55.45 on an upgrade from “hold” to “buy” from Societe Generale, based on the assumption that the Spanish construction group will complete its takeover of airport operator BAA.

In the insurance sector, Allianz was up 3.5 percent to €118.48, while RAS gained 2.9 percent to €18.57 and Axa advanced by 1.3 percent to €24.30.

In Europe on Tuesday, equities markets were down on a day when every single sector saw declines in a general sell-off as investors acted on concerns over what they feared might happen to interest rates worldwide. The FTSE Eurofirst 300 declined by 1.9 percent on the day to 1,280.55. In Germany and in France the Xetra Dax and the CAC had each lost over 2 percent by the close.

Ferrovial of Spain was down 4.7 percent to €57.95 on the news that British airports operator had accepted their offer rather than a higher bid from a group led by investment bank Goldman Sachs. The decline came as some analysts expressed the belief that Ferrovial has taken on more than it can handle with the offer. Meanwhile, BAA’s London-listed shares closed below Ferrovial’s bid of 950.25 per share.

Still in aviation-related shares, discount airline Ryanair dropped 1.2 percent to €6.80 despite a full-year earnings report that was a bit better than had been expected. Dresdner Kleinwort Wasserstein reiterated its “buy” recommendation on the air carrier.

European automobile manufacturers saw substantial declines. DaimlerChrysler was down 4.2 percent to €38.33 after Credit Suisse lowered its target share price for the carmaker from €46 to €44. Elsewhere in the sector, Porsche lost 3.4 percent to €748.87, while Fiat dropped 3.3 percent to €10.08 and BMW was 3 percent lower at €37.88.

In the pharmaceutical sector, Irish drug maker Elan lost 16.3 percent to €12.35 after its drug Tysabri, a treatment for multiple sclerosis drug was approved by the US Food and Drug Administration only for use in patients who have not responded to other treatments. Tysabri was taken off the market last year after some patients being treated with the drug experienced fatal side effects. Serono, the Swiss drug maker, added 1.3 percent on the day to SFr796 on a Bear Stearns comment that it did not see the FDA ruling in Elan’s favor as a threat to Serono’s MS drug, Rebif.

Declines in shares of financial companies sent the FTSE Eurofirst 300 down by 0.8 percent to 1,379.72 on Wednesday. While financials posted generally positive quarterly reports, investors took profits, sending share prices down.

In the banking sector, both Deutsche Bank and Credit Suisse issued quarterly reports this week that showed profits up more than had been expected. Credit Suisse said Tuesday that it had achieved record profits in its investment banking division, but because some analysts wondered whether those profits could be sustained over the longer term, Credit Suisse dropped 2.3 percent on the day to SFr77.10. Meanwhile, Deutsche Bank reported a net profit of 55 percent in the first quarter. It also announced a share buyback plan for up to 10 percent of its shares. Despite this news, Deutsche Bank was down 1.7 percent to €95.56. Nordea was also down, by 2.4 percent to SKr93.50, even though its first-quarter earnings were higher than had been expected.

German insurer Allianz also saw its share price decline on the day even though its quarterly report showed earnings higher than predicted. Allianz dropped 1.7 percent to €131.60.

A report of record first-quarter profits didn’t help BMW avoid a losing session, either. Despite healthy sales in Europe and the US in April and an 81 percent increase in net income in the quarter, the automobile manufacturer saw its shares decline by 2.7 percent to €42.26.

In the construction sector, Spanish company Grupo Ferrovial was up 2.9 percent to €67 after it released a first-quarter report showing net profits were up 43.6 percent. However UK operator BAA again rejected Ferrovial’s bid even after Ferrovial said that it would raise its bid if it was allowed to complete due diligence. BAA said that Ferrovial’s bid had undervalued its business.