The FTSE Eurofirst 300 was 0.4 percent higher to 1,357.94 on Thursday as much of the Italian banking sector saw gains on the day. The success of the sector also sent the S&P/MIB index in Italy up by 1.2 percent to 37,733.

The major exception to the gains in Italian banks was UniCredit, which was 0.4 percent lower to €6.207. Banca Intesa and Sanpaolo IMI were both higher on news that they are in talks toward a merger which, if completed, would create Italy’s second largest bank, behind UniCredit. Intesa was 7.6 percent higher to €5.025, while Sanpaolo added 6.1 percent to €15.558. Elsewhere in Italy, Mediobanca was up 5.1 percent to €17.064 and Capitalia advanced by 2.9 percent to €6.763.

Other gainers included Swatch, which added 4.3 percent to SFr47 on higher profits and sales. Credit Suisse issued positive comments on the Swiss watchmaker. In the telecommunications equipment sector, Ericsson added 0.9 percent to SKr22.90 on the announcement that it had secured a $1 billion contract with Indian telecom Bharti Airtel to upgrade and expand its network. EADS gained back part of its losses earlier in the week that were due to concerns over delays in two big development projects, adding 2.5 percent to €22.60.

The oil sector saw declines after gasoline inventories in the United States rose unexpectedly last week. Statoil dropped 0.9 percent to NKr176, while Neste Oil declined by 1 percent to €25.42.

Cement maker Holcim dropped 1.2 percent to SFr98 even though profits in the first half were up b y 44 percent. Holcim’s German rival Heidelberg Cement also dropped 1.2 percent, to €97.50, while Lafarge dropped 0.3 percent to €99.30. All were affected by the news out of the United States on Wednesday that house sales are down, raising concerns about construction markets around the world.

European equities markets were up on Wednesday, helped significantly by good news in the breweries sector. The FTSE Eurofirst 300 gained 0.3 percent to 1,353.84, while Frankfurt’s Xetra Dax was up 0.5 percent to 5,828.65 and France’s CAC 40 was up 0.6 percent to 5,022.35.

Utilities, which were up on Tuesday over bid rumors, saw declines as German utility Eon’s bid for Spain’s Endsea has already come in for criticism from the Spanish government and analysts say that regulators will examine the deal carefully before approving it. Endsea was down 0.2 percent to €27.49 and Eon dropped 0.1 percent to €95.62.

Other losses on the day included chemical group BASF, down 0.1 percent to €62.94 after disclosing that its fourth-quarter earnings were lower than had been expected. Also, in the auto sector, DaimlerChrysler dropped 1.5 percent to €46.56 on a downgrade from “outperform” to “neutral” from Credit Suisse. Irish telecommunications company Eircom was also down on the day on confirmation that Australian investment company Babcock & Brown Capital has approached Eircom about a takeover bid. Eircom dropped 0.6 percent to €2.19.

The breweries had a much better day of it. Heineken gained 3.8 percent on the day to €30.67 after it reported that its full-year profits were up 18.5 percent to €761 million on a 5.3 percent rise in the volume of beer sales. Meanwhile, Dutch brewer Grolsch gained 17.4 percent to €28.0 after it signed a US distribution agreement with Anheuser-Busch, a move which gained Grolsch an upgrade to “buy” from Rabo Bank.

Also seeing a gain on the day was cement company Holcim, the world’s largest. Holcim saw its share rise by 3.2 percent to SFr102.30 when UBS raised its target price from SFr107 to SFr123 and repeated its “buy” recommendation due to what it called the company’s growth potential in emerging markets and a positive outlook in US markets.