In slow trading due to the Martin Luther King Jr. holiday in the United States, the FTSE Eurofirst 300 nonetheless gained 0.6 percent on the session to close at 1,520.04.

The oil sector was higher even though crude oil prices remained low. OMV added 0.5 percent to €39.38 despite a UBS target share price downgrade from €45 to €43. Repsol gained 0.7 percent to €25.40, while Neste Oil was 2.5 percent higher to €23.07. Even bigger gains were achieved by Norsk Hydro and Statoil, proposed merger partners. Norsk was up 3.2 percent to NKr188.25, while Statoil added 4 percent to NKr162.

In the aerospace sector, EADS gained 2.7 percent to €25.75 on the news that its Eurocopter unit had won a contract to build 37 helicopters for the French police. Engine makers for airplanes, however, were mixed. MTU Aero Engines added 3.2 percent to €37.16 as Deutsche Bank reiterated its “buy” recommendation on the German manufacturer. However, Deutsche Bank reduced its recommendation for French engine maker Safran from “hold” to “sell” on earnings issues. Safran dropped 1 percent, to €17.20.

Merck added 1.8 percent to €89.04 on a raised price target and reconfirmed “overweight” rating from Lehman Brothers. The German pharmaceuticals company, which offered last week for the 16 percent of Serono that it does not yet hold, added 1.8 percent to €89.04.

European equities markets were higher on Wednesday as the banking sector was mixed but mostly higher. The FTSE Eurofirst 300 closed at 1,471.57, a gain of 0.6 percent and just below a five-year high. In Germany, meanwhile, the Xetra Dax ended the session at 6,520.77, its highest closing level since February 2001.

French publisher Lagardere added 2.5 percent to €59.10 on an upgrade from “neutral” to “buy” from UBS, which said it sees the possibility of growth by the publisher. Elsewhere in France, utility EDF added 4.8 percent to €55.55, a record high share price, on hopes that tariffs will go up soon. EDF’s shares have risen more than 15 percent since the end of November. On the other hand, French airplane engine manufacturer Safran dropped 6 percent to €15.95 after announcing that it was investigating accounting problems in its defense security unit and dropping its full-year operating profit margin target to 4 percent.

Raiffeisen International was 6.1 percent higher to €107.13 on growth potential in central and eastern Europe, where the Austrian bank has extensive holdings. In addition, Citigroup began coverage of Raiffeisen with a “buy” rating and a target share price of €124. Among other Austrian banks, Erste Bank added 0.5 percent to €57.63. Erste also has exposure to eastern Europe.

Elsewhere in the sector, ABN Amro was 3 percent higher to €24.10 on the news that it has completed its purchase of Italian bank Antonveneta. There were also rumors that ING is interested in bidding for ABN, its larger Dutch rival. ING gained 2.2 percent to €33.16.

The FTSE Eurofirst 300 ended the week at 1,445.39 on Friday, adding 0.3 percent for the session and brining its gains since the beginning of the year to 13 percent. The day’s close was its highest since early June 2001.

Several sectors saw gains over the week. The forestry and paper sector did very well. UPM Kymmene was 6 percent higher to €19.9, while Stora Enso added 8.2 percent to €12.73 and M-Real of Finland gained 17.2 percent to €4.83 on the introduction of a restructuring plan.

Safran, the French manufacturer of jet engines, added 7.3 percent over the week to €16.84 on rumors of a merger with defense company Thales.

Spanish property group Metrovacesa was the big gainer of the week as it was up 18.4 percent to €125.1. It is now 70.2 percent higher than it was at the beginning of September on the strength of bids rumors.

Among losers this week, Nokia dropped 4.2 percent to €15.4 on disappointing quarterly results and lower prices for its phones. Software maker SAP fell 4.9 percent to €156.85, also on its quarterly report. In the semiconductors sector, ASML was 6.9 percent lower to €17.9, while Akzo Nobel was down 10.5 percent on its quarterly report and on the delay of its new anti-schizophrenia drug.

After seeing losses on Tuesday, the FTSE Eurofirst 100 added 0.9 percent on Wednesday to 1,441.48 on several bits of positive news.

Automobile manufacturer Fiat was 5.7 percent higher to €13.53 on rumors that it wants to sell its truck making division. It didn’t hurt that JPMorgan issued positive comments, saying that Fiat stands to double operating profits in the third quarter.

French jet engine manufacturer Safran also gained 5.7 percent, to €16.87, on rumors that there is a merger in the works between it and defense electronics company Thales. Thales added 1.7 percent to €36.58 on the speculation.

The forestry and paper sector saw gains when M-Real of Finland announced a major restructuring, saying that it will cut costs and cut capacity. It also announced the appointment of a new chief executive. M-Real added 14.9 on the news to €4.78. Among others in the sector, UPM Kymmene was 3.8 percent higher to €19.50, while Stora Enso advanced 5.3 percent to €12.61.

ASML, which makes semiconductor manufacturing equipment, dropped 6.6 percent to €17.75 as not all analysts were enthusiastic about its third-quarter report. ABN Amro dropped its recommendation from “hold” to “sell”, while Dresdner Kleinwort reaffirmed its “sell” recommendation. Both cited slowing orders as the cause for their disappointment. Deutsche Bank, however, reiterated its “buy” rating on ASML.

Dutch pharmaceuticals group Akzo Nobel also saw declines, falling 8.9 percent to €43.35 after it said it would delay the release of asenapine, it’s new anti-schizophrenia drug and released third-quarter results that were not up to analyst predictions.

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.