The FTSE Eurofirst 300 dropped 5.1 percent during the week and was down 1.4 percent on the year when it closed at 1,463.3 on Friday.

Banks were lower, with those exposed Turkey and Eastern European markets doing the worst. EFG Eurobank (ASE: EFG) dropped 8.4 percent to €27.20 after it agreed this week to purchase 70 percent of Tefkenbank of Turkey. Raiffeisen International (WBAG: RIBH) fell 9.2 percent to €102.25; the Austrian bank owns assets in Central and Eastern Europe. National Bank of Greece (LSE: NBGA; NYSE: NBG), owner of Finansbank of Turkey, was 9.5 percent lower to €38, while Alpha Bank (OTC: ALBKY) fell 12.5 percent to €21.88 even though it reported that profits were up by 24.6 percent in 2006.

Software maker SAP (FWB: SAP; NYSE: SAP) added 1.4 percent during the week to €35.34 after bids rumors and a reiterated “buy” rating from Deutsche Bank (NYSE: DB).

In the automobile manufacturing sector, Volkswagen (OTC: VLKAY) and Porsche (FWB: POR3) were both lower, even though VW reported good results from its Audi division. VW dropped 1.8 percent on the week to €93.22, while Porsche fell 6.7 percent to €968.21.

Moller Maersk, the Danish shipper which has exposure to Russia and China, saw its B shares drop 7.2 percent lower this week to DKr58,200.

Rumors of mergers in Europe’s aerospace and defense sector sent European equities higher on Tuesday even though the oil sector declined as crude oil prices continued to drop. The FTSE Eurofirst 300 ended the session at 1,367.4. 0.2 percent lower.

Defense electronics company Thales and airplane engine manufacturer Safran were both said to be interested in bidding for French aeronautical supply company Zodiac. While Zodiac denied the rumors, all three companies saw gains on the session. Thales added 2.8 percent to €33.67, while Safran gained 4.5 percent to €16.79 and Zodiac was 6.8 percent higher to €47.69. In addition Alcatel, owner of 10 percent of Thales, was up 1.2 percent to €9.61.

Among oil companies, Cepsa dropped 2.1 percent to €55.50, Statoil declined by 3.2 percent to NKr168.50 and OMV was 3.7 percent lower to €41.25.

The semiconductors sector was helped by a prediction from Japanese company Elpida Memory that its sales could double this year. Infineon was 1.6 percent higher to €9.17 and ASML added 1.9 percent to €16.78. A reconfirmation of Merrill Lynch’s “buy” recommendation sent STMicroelectronics up 2.1 percent to €12.96.

In the transport sector, Danish container shipper Moller-Maersk added 3.1 percent to DKr46,900 as it said that its net profits in the first half dropped less than they had been expected to decline.

Drugmaker Bayer was down 0.7 percent to €39.26 even though its second quarter core earlings were up 14.1 percent, more than had been forecast. Elsewhere in the pharmaceuticals sector, Roche added 0.5 percent to SFr226.80 and Novartis was 0.6 percent higher to SFr70.50, both helped by the approval in Switzerland of Lucentis, a blindness treatment.

The FTSE Eurofirst 300 was up 2.4 percent this week to 1,313.62, for its best week since January, but it was down by 4.1 percent in the second quarter of 2006. The 300 has added 3 percent since the beginning of the year, but it will need to make up a lot of ground if it is to match its 2005 full-year gain of over 20 percent.

The steel sector saw gains on the week after Arcelor rejected a bid from Severstal, which was seen leaving room for an already-arranged merger with Mittal Steel. Arcelor added 7.8 percent during the week to €37.74. Elsewhere in the sector, ThyseenKrupp gained 3.8 percent to €26.77, while Salzgitter was up 6.9 percent to €66.37. Voestalpine advanced by 7.3 percent to €117.60.

European tiremakers saw declines after Japanese tiremaker Bridgestone of Japan cut its profits estimate for the year. Michelin was down 1.3 percent on the week to €47, while Continental fell 1.6 percent to €79.92.

Danish shipper AP Moller-Maersk declined by 5.2 percent to DKr45,400 on a reduced profits forecast for the year due to sub-par performance in its container shipping unit.

Bayer added 4.5 percent on Friday and 8.4 percent on the week to €35.94 after it said that it will sell part of its diagnostics unit to Siemens, which added 0.8 percent on the day Friday and 0.2 percent during the week to €68.03. Several banks either upgraded or reiterated their positive recommendations for Bayer during the week.

European equities markets were up on Wednesday even though investors seemed determined to put off much activity until after the US Federal Reserve announces its decision on US interest rates. Its announcement will come after European markets close on Thursday.

The FTSE Eurofirst 300 added 0.2 percent to close the session at 1,272.25.

Oil stocks were up again as the price of crude oil continued to rise. Total gained 0.5 percent to €49.48, while Neste Oil was up 1.1 percent. Royal Dutch Shell A-shares listed in Amsterdam advanced by 1.5 percent to €25.61.

The media sector saw gains after the takeover saga involving US company Warner Music and the UK’s EMI stepped into the spotlight. Telecom Italia Media, which runs two broadcast television stations, digital channels, and a news agency, added 8.5 percent to €0.3718 after rumors escalated that publisher De Agostini might make a bid. However, Telecom Italia, down 1 percent to €2.118, which holds 69 percent of TI Media, and De Agostini both denied that there was a deal in the works. Elsewhere in the sector, Mediaset added 0.9 percent to €8.93. French broadcaster TF1 added 2.2 percent to €24.78, while its rival M6 gained 1.5 percent to €23.70.

After a decline of 9 percent on Tuesday, Danish shipper AP Möller-Maersk added 2.6 percent to DKr44.100 even though HSBC lowered its recommendation from “overweight” to “neutral” and lowered its target share price from DKr60.155 to DKr47.72.

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.

The FTSE Eurofirst 300 was down 0.9 percent this week to 1,370.43. However, it added 2.6 percent during the month and gained 8 percent during the first quarter of 2006. The week’s losses were put to profit-taking amid worries about rising interest rates in both the eurozone and the United States.

Among gainers on the week were the oil sector. Statoil gained 5.3 percent to NKr189 and Neste Oil added 4.4 percent to €28.37. Elsewhere, ENI received permission from the European Commission to build a higher stake in Galp Energia, the Portuguese oil company. The news sent Energias de Portugal up 6.9 percent to €3.24 on speculation that the Portuguese energy sector could see further mergers and acquisitions.

Swiss biotechnology company Serono dropped 1.9 percent to SFr908.50 on speculation that it might be looking to buy elsewhere. Earlier in the week it had been thought that it might receive bids itself. Meanwhile Bayer, the German pharmaceuticals group, lost 6.7 percent to €33.06 after it raised €2.3 billion in a convertible bond issue so that it can buy Schering. Merck had earlier dropped out of the bidding.

Danish shipping group Moller Maersk was down 9.9 percent on the week to DKr52,900 on disappointing profits for 2005. It warned that low freight rates and rising oil prices will send profits 10 - 15 percent lower in 2006 than they were last year.