The FTSE Eurofirst 300 added 0.4 percent on Tuesday to close at 1,462.53 as merger rumors continued in the banking sector.

There were gains in the retail sector. Carrefour added 2 percent to €47.22 after Tesco decided to buy the other half of China-based supermarket chain Hymall. The move underscored the value of the French retailer’s interests in that Asian nation. Ahold was 3.9 percent higher to €7.81 on speculation about the Dutch retailer’s restructuring after it agreed to sell part of its interests in the US last month. Some hedge fund investors are urging Ahold to completely divest itself of US holdings.

In the banking sector, Nordea added 6.7 percent to SKr107 after it became known that Sampo of Finland purchased 12.8 million more shares of the bank in November. Bids rumors circulated although some analysts said that Sampo was simply looking for a better position before the Swedish government sells its stake in Nordea. Sampo added 3.1 percent to €20.20 on the speculation, while Svenska Handelsbanken added 0.5 percent to SKr192.50 and SEB gained 2.6 percent to SKr213.00.

Stock exchange operator Deutsche Borse dropped 2.1 percent to €134.22 on a downgrade from “add” to “hold” from West LB, which cited valuation issues as a reason for its move.

In the electronics sector, meanwhile, Philips Electronics was 0.7 percent lower to €27.72 after its joint venture in South Korea, LG.Philips LCD, dropped almost 8 percent after being looked at by authorities concerning allegations of price fixing.

European equities markets were up on Tuesday, mainly on gains in the energy sector spurred on by a bidding war for Spain’s Endsea.

The FTSE Eurofirst 300 was up 0.7 percent to 1,355.05. In Frankfurt, the Xetra Dax fained 0.7 percent as well, to 5,836.56, while in Paris the CAC 40 was up to 5,013.78.

Eon, Germany’s largest energy firm, has launched a counter bid for Endsea, which has already received an offer from Gas Natural, another Spanish company. Because Eon’s bid is nearly three times Gas Natural’s market value, it isn’t considered likely that Gas Natural will improve its bid. However, Gas Natural is expected by some analysts to instead bid for Iberdrola.

Eon was trading up 2.9 percent to €96.10 after an initial decline. Endsea was up 9.4 percent to €27.87, while Iberdrola gained 6.7 percent to €27.05 and Gas Natural was up 0.9 percent to €24.56. Other European utilities also benefited from the speculation. Suez was up 3.3 percent to €30.66, Energias de Portugal gained 3.5 percent to €2.94, RWE rose 3.6 percent to €72.80, and Veolia Environment advanced by 3.9 percent to €44.00.

In other sectors, brewer Carlsberg was down 3.4 percent to DKr369 despite reporting a full-year operating profit up 3.4 percent from 2004, well below the 7.3 percent increase that had been expected.

Swedish bank Svenska Handelsbanken, however, reported higher than predicted operating profits for the full year, sending its shares up 4.4 percent to SKr201.