European equities markets began the new year with gains on Tuesday. The FTSE Eurofirst 300 added 1.2 percent to 1,501.83, the first time it has closed above 1,500 since February 2001. Meanwhile, Frankfurt’s Xetra Dax gained 1.2 percent and the CAC 40 was up 1.4 percent.

Utilities were still in the grip of bids rumors. The Suez/Gaz de France merger looked to be in more trouble. A court decision put the deal in doubt when it ruled that the merger cannot go further until European Union energy markets are fully liberalized on July 1. Added to that, there were rumors that a French billionaire is considering a bid for Suez, which he would then break up. According to these reports, he would sell the company’s energy assets to Gaz de France, but its environmental division would go to Veolia Environment. All the talk left Gaz de France steady at €34.85, while Suez added 1.9 percent to €39.90 after going as high as €40.50 during the session. Veolia, on the other hand, dropped 4.1 percent to €56 after significant gains on Friday.

In the retail sector, German retailer Metro added 5.7 percent to €51.06 on reports that one of its largest shareholders is going to raise its stake. The gains came even though the reports were denied. Also helping was a report from the German Retail Association that showed sales up substantially in December in the face of an expected drop.

Steelmaker ThyssenKrupp was 2.8 percent higher to €36.69 as consolidation hopes for the sector were given another boost by the news that Harris Steel of Canada has agreed to be taken over b y US company Nucor.

The FTSE Eurofirst 300 was up by 0.4 percent on Friday, but ended the week down 1.5 percent from where it began on Monday, closing out the session at 1,356.66.

In the telecommunications sector, Telecom Italia was 1.4 percent higher on Friday, to €2.26, ending the week 4.2 percent higher on talk that it will sell its mobile phone operations for around €35 billion. It has also been rumored that it might divest itself of its fixed-line network. The news spurred Dresdner Kleinwort to repeat its “buy” recommendation and target share price of €40. Pirelli, the biggest shareholder in the company controlling Telecom Italia added 4.7 percent on the day and was 11.6 percent higher on the week to, closing at €0.77. Meanwhile, mobile handset maker Nokia fell 6.1 percent to €15.15 this week as rumors that it will issue a profits warning soon continued to circulate.

In the retail sector, Ahold gained 3.3 percent during the week to €7.73, but JP Morgan was not impressed, saying that management had not adequately explained why the company’s US results were so much better in the second quarter than in the first, saying that if second-quarter gains were largely from one-off factors that they should not be used to predict future results. Elswhere, Metro dropped 6 percent to €43.32 after a group of shareholders said that they will sell their 5.4 percent stake in the German retailer.

In Europe on Thursday the equities markets fell, with the FTSE Eurofirst 300 declining by 0.2 percent to 1,355.46. Banking and retail were up on the day, but utilities were mixed and foods were down.

Among bankers DnB Nor, Norway’s largest bank, was up 0.9 percent to NKr81.50 after a strong performance in its brokerages led to a 28 percent leap in pre-tax profits in the fourth quarter.

German retailer Metro was up 4 percent to €43.90 on reports that German business confidence was at a 14-year high. Elsewhere in the retail sector, France’s Carrefour turned a comment by Deutsche Bank that its stock was undervalued into a gain of 3.1 percent to €40.86.

In the utilities sector, bid rumours continued but not to the huge benefit of companies in the sector as earlier in the week. Gas Natural was up 2.6 percent to €24.90 when Spanish construction company FCC said it would think about joining in a bid for Endsea. While Gas Natural gained on the talk, FCC dropped 0.4 percent to €57.10 and Endsea declined by 0.7 percent to €28.06. French utility Suez, gained 7 percent early in the day on rumors that it might be a takeover target by Enel, but by the end of the day Suez was only up 0.3 percent to €32. Elsewhere in the sector, EDF was up 1.5 percent to €42.47 on an announcement that its net profits had doubled, while RWE dropped 2.7 percent to €72.60 after issuing a statement saying that operating profits in 2006 would likely only grow by 5 to 10 percent.

Nestle was down by 3.3 percent to SFr386.50 despite a report of net profits in line with expectations and up 20.7 percent from 2004s figures. One analysts said that the profits report showed Nestle’s strength and that share prices do not reflect that strength, while Nestle’s chief executive put down reports that the company could be interested in bidding for Danone or Numico. Numico, meanwhile, dropped 1.7 percent to €37.13 as it announced disappointing results on fourth quarter sales, especially in baby food.