The FTSE Eurofirst 300 ended the day at a five-year high as it closed 0.6 percent higher to 1,480.76. The gains came as analysts at Standard & Poor’s said that the active year in mergers and acquisitions could be topped by next year’s activity.

The airlines sector saw gains as investors looked for more consolidation in the sector after the recent record amount paid for the takeover of Qantas of Australia. Iberia was up 1.1 percent to €2.81, while Lufthansa added 1.3 percent to €20.87 and SAS gained 1.4 percent to SKr108.00.

In the pharmaceuticals sector, Novo Nordisk added 2.5 percent to DKr468 on an upgrade from “hold” to “buy” from Citigroup. The broker also raised Novo’s target share price from DKr445 to DKr525, citing the positioning of the drug maker and healthcare group to capture more business as more and more people become diabetic. It also said that Novo’s growth potential from its anti-obesity drug had not yet been priced into to its share value.

Also in the healthcare sector, Nestle and Novartis both benefited from Nestle’s agreement to purchase Novartis’ medical nutrition unit for $2.5 billion. The deal was said to position Nestle second only to Numico in providing special foods for patients. Nestle added 1.5 percent on the news, to SFr436, while Novartis gained 1.8 percent to SFr71.35 and Numico was up 2.9 percent to €40.13.

In the automobile manufacturing sector, Porsche was 2 percent higher to €955.00 when HVB increased its target share price from €995 to €1,104. Meanwhile, Volkswagen was 0.2 percent lower to €84.00.

In Europe on Tuesday the FTSE Eurofirst 300 added 0.7 percent to 1,439.93, helped out by a strong start to the trading day in New York.

Stock exchanges were higher on the session. Deutsche Borse added 2.2 percent to €127.25 on an upgrade from “hold” to “add” by West LB. Even though the broker dropped its target price for Euronext while reiterating its “hold” recommendation, the pan-European exchange gained 2.3 percent to €87.30 after European regulators provisionally approved its takeover by NYSE Group.

Among airlines, Alitalia was 6.4 percent higher on an announcement from the Italian government that it will sell at least 30.1 percent of its stake in the airline. Italian law will require whoever buys the government stake to make a cash offer for the rest of the carrier.

In France, EDF gained 2.6 percent to €53.35 as it continued to reap benefits from a ruling last Friday that in practical terms meant that French rates for electricity are likely to rise.

The pharmaceuticals sector was up on news about diabetes drugs. Sanofi Aventis added 3 percent to €67.85 after it said a weight-loss drug, Acomplia, could also help in the treatment of type-2 diabetes. Meanwhile, Novo Nordisk gained 4.3 percent to DKr464.50 on its claim that a long-acting insulin, Levemir, both helped blood sugar levels in those with diabetes but also helped them lose weight.

The FTSE Eurofirst 300 was up 0.2 percent over the week to 1,448.46 for its fifth week in a row of positive movement.

The automobile manufacturing sector was up on pleasing quarterly reports. Fiat added 0.3 percent over the week to €13.86, while Renault gained 1.3 percent to €90.90 and DaimlerChrysler was 4.5 percent higher to €43.27.

In a related sector, tire makers saw mixed results. While Michelin added 4 percent over the week to €64 on a quarterly report that was about where analysts expected it to be, Continental dropped 5 percent to €87.49 on negative comments from both Goldman Sachs and Deutsche Bank.

The pharmaceuticals sector was lower. Sanofi-Aventis was 2.2 percent lower for the week to €68.65 and Novo Nordisk declined 4 percent to DKr455. The sector was hurt by the announcement from AstraZeneca in the UK that trials of a new drug to treat stroke patients had not been successful.

On the other hand, the telecommunications sector saw gains during the week on quarterly results and bids rumors. The biggest winner was Telenor, which added 13.2 percent this week to NKr103 after its quarterly results brought positive comments and target share price increases from a number of brokers. France Telecom also did very well, gaining 8.8 percent to €20.56 as its third-quarter report earned it target share price increases from UBS and Citigroup.

There were gains elsewhere in the sector, with OTE of Greece being the exception. OTE dropped 0.2 percent to €19.80 on rumors that Telekom Austria could be looking to buy a share of the Greek telecom. Telekom Austria added 0.1 percent to €20.01. Telefonica gained 5.5 percent to €15.06 and Deutsche Telekom was 6 percent higher to €13.52.

Despite gains in several sectors due to continuing mergers and acquisitions news and rumors, the FTSE Eurofirst 300 dropped 0.1 percent to 1,370.04 on Monday as crude oil prices continued to decline.

Speculation that Spanish construction company OHL was discussing a possible merger with French peer Eiffage sent Eiffage 3.6 percent higher to €78.25. OHL added 4 percent to €15.75. Meanwhile, Sacyr Vallehermoso gained 1 percent to €32.05 on rumors that Sacyr is thinking of adding to its current 33.3 percent holding in Eiffage.

In the pharmaceuticals sector, UCB of Belgium said it would purchase Schwarz Pharma of Germany, a move that Credit Suisse said made sense. The news sent UCB 0.1 percent lower to €47, but Schwarz was 17.7 percent higher to €89.07. Others in the sector were benefited by the news, including Novo Nordisk, which gained 1.3 percent to DKr432.

There was also bids talk in the airlines sector as Lufthansa was said to be looking to buy, although it said that remarks by its CEO had been misinterpreted. Lufthansa dropped 0.4 percent to €16.14. Despite the denials SAS, which was said to be one of the rivals Lufthansa was interested in, was 2.1 percent higher to SKr97. Ryanair added 3.7 percent to €8.45. The gains were helped as well by the falling oil prices.

Declines in the oil sector were substantial. Neste Oil fell 3.8 percent to €21.16, while Norsk Hydro dropped 4.5 percent to NKr138.75 and Statoil declined 5 percent to KNr147.25.

The banking sector helped the FTSE Eurofirst 300 to a gain on Wednesday’s session. The Eurofirst was 1.1 percent higher to 1,341.18.

Banks weren’t the only gainers, however. Novo Nordisk, which is the world’s largest producer of insulin, gained 7.6 percent to DKr391.50 on a report that its operating profits were up by 17 percent in the first half of the year. In the electronics sector, Phillips added 4.1 percent to €26.20 ahead of an expected announcement that Silver Lake Partners and Kohlberg Kravits Roberts have prevailed in the bidding to purchase the company’s semiconductor unit.

Automobile manufacturer, BMW added 0.4 percent to €39,92. Shares in BMW had gone as high as 4 percent higher earlier in the day on the strength of its quarterly report, but it lost almost all of that gain when it was announced that the family that holds almost half of the carmaker’s stock will sell around 1.5 percent of that stake.

Among banks, Bank of Ireland added 2.2 percent to €14.26, while Anglo Irish Bank was up by 2.7 percent to €11.70. Allied Irish Bank gained 3.8 percent to €19.94 on an upgrade from “sell” to “neutral” from Goldman Sachs. In addition, Lehman Brothers raised its target share price on Allied from €20.18 to €21.75 and Deutsche Bank advanced its target share price from €21.50 to €22.

BNP Paribas ended the session at €78.20, 4.2 percent higher, after its second quarter report showed net profits up by 30.6 percent. Profits were helped by its acquisition of the Italian bank Banca Nazionale del Lavoro. Bucking the trend, Credit Suisse was down by 3.4 percent to SFr66.60 when its earnings report for the second quarter was at predictions but no better.

Among notable losers on the session was Mittal Steel, which fell by 2 percent to €26.50. The decline came on news that net profits for the recently acquired Arcelor were below expectations and even though Mittal‘s own report beat predictions.