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.

In Europe on Tuesday, the FTSE Eurofirst 300 dropped 1.2 percent to 1,367.27. Italian politics had more than a little to do with the day’s trade. Romano Prodi unseated Prime Minister Silvio Berlusconi but only by a narrow margin that left it unclear how many reforms the new parliament would be able to enact.

The Italian banking sector was down significantly in the wake of the election results. Unicredito dropped 3.8 percent to €5.83, while Banche Popolari Unite lost 3.5 percent to €19.48 and Mediobanca was down 3.4 percent to €17.23. Elsewhere, Swiss bank UBS lost 1.7 percent to SFr144.10 after it said it would buy Piper Jaffray’s private client branch network, paying $500 million cash for the acquisition. The loss came even though analysts said the purchase was a good one for UBS.

Despite his loss in the Italian election, Silvio Berlusconi’s day wasn’t completely a loss. His Mediaset broadcasting company added 1.1 percent to €10.17 as analysts said its shares were trading at a discount. Bear Stearns reiterated its “outperform” rating and target share price, set at €12.

Shares in companies that must purchase fuel were down as crude oil prices again were up. Ryanair declined by 2 percent to €7.38, while Lufthansa dropped 3.2 percent to €14.33 even though it reported an 0.4 percent rise in traffic.

In the telecommunications sector, the largest maker of telecom equipment, Nokia, added 3.7 percent to €17.60 after it announced that first-quarter handset prices had gone up to €103, above its forecast of €99 or less. Before the report was released, Dresdner Kelinwort Wasserstein had reiterated its “sell” recommendation on the stock predicted a lower selling price for handsets and consequent limits to revenue growth in the quarter.

Equities markets in Europe saw advances on Monday on the strength of gains the oil sector as the FTSE Eurofirst gained 0.2 percent to 1,345.92, a new four and a half year high.

The oil sector was up on higher crude oil prices. Statoil gained 3.5 percent to €178. Meanwhile Saipem, the largest oil field services company in Europe, was up 3.1 percent to €16.04.

The banking sector was also up, with more takeover talk in Italian banking. Mediobanca, rumored to be a target despite an agreement that gives core shareholders 54 percent of the bank, was up 4.2 percent to a record high share prices of €17.60. Capitalia, also seen as a potential takeover target, gained 2.8 percent to €6.325. Meanwhile, EFG Eurobank was up 4 percent to €33.06 as JP Morgan raised its price target from €40 to €44 on the strength of the bank’s expansion in southeastern and central Europe.

Utilities were up on the day as well, with Electricite de France gaining 2.2 percent to €41.56 on consolidation talk. Eon gained 0.6 percent to €93.44 after its chief executive said he expects that three dominant players will emerge in the sector.

The pharmaceuticals sector was mixed. Schering was up 3.3 percent to €58.39 on an announcement that its fourth-quarter operating profits were up 30 percent, slightly higher than forecasts. It also said that it will buy the property and equipment used by its US partner, Chiron, to produce the drug Betaferon (Betaseron in the US), which is expected to be approved for the treatment of early-stage multiple sclerosis before the end of the third quarter. Shares in Novartis, which has not yet finalized its planned purchase of Chiron, was up 0.1 percent to SFr71.50.

Elsewhere in the sector, Serono dropped 2.2 percent to SFr959 as concern grew about competition between its multiple sclerosis drug Rebif with Betaferon. Sanofi-Aventis dropped 3 percent to €71.70 after regulators in the United States delayed final approval of Acomplia as a weight management treatment and rejected the drug as a stop-smoking aid.