European shares nudged up to end Friday's session at a fresh five-year closing peak, buoyed by renewed bid speculation as investors shrugged off global growth worries sparked by softer-than-expected US jobs data.
Steel stocks including Corus helped bolster gains, while banks made headway, with Spain's Banesto and Britain's Barclay's rising on bid talk.
The FTSEurofirst 300 index of leading European shares ended up 0.2 per cent at 1,412.3 points, its highest close since July 2001. The index gained around one per cent on the week.
"Markets are still rising against a wall of worry, everyone doubts if the situation can keep on as it is, but equity markets don't look expensive," said Andreas Gartner, SEB fund manager.
"The risk premium is normalising. We see rumours and lots of M&A, a lot of money is going around the market and looking for performance."
Across Europe, the FTSE 100 ended down 0.1 per cent, while the DAX gained 0.2 per cent and France's CAC 40 fell 0.1 per cent.
Wall Street stocks fell after weaker-than-expected jobs data raised concerns that economic growth was slowing, but not sufficiently to prompt further interest rate cuts.
The September nonfarm payroll data showed US employers added just 51,000 jobs in September, far below economists' median forecast of 125,000. August's payroll figure was upwardly revised to a rise of 188,000 jobs.
Steel stocks rallied, with ThyssenKrupp up 2.5 and Corus 1.5 per cent higher as bid talk continued to swirl through the sector a day after India's Tata Steel said it was considering a bid for the Anglo-Dutch group.
Banking stocks also gained, with Banesto up 3.8 per cent, and Barclays up 1.8 per cent on talk that Grupo Santander, BBVA and Citigroup were looking for acquisitions.
However, Santander denied talk it was looking to buy the rest of Banesto and took the opportunity to douse another rumour that it was interested in buying BBVA, whose shares fell 0.5 per cent.
Barclays declined to comment on the latest speculation.
On the downside, EADS fell another three per cent after a German government spokesman said Chancellor Angela Merkel and French President Jacques Chirac are likely to discuss the troubled aerospace group when they meet next week in Paris.
UK aero-engine maker Rolls-Royce Plc also said it had suspended work on the engine for EADS's Airbus A380 superjumbo for about 12 months.
In other news, PartyGaming jumped 3.8 per cent following reports that it may seek to exploit loopholes in a US bill against online gambling which wiped billions of pounds off sector values yesterday.
Shares in Irish airline Aer Lingus climbed 2.8 per cent as speculators judged budget carrier Ryanair would have to raise its surprise offer for the group.
Utilities also rose, with Viridian up eight per cent after Northern Ireland's main electricity supplier agreed to a 1.62 billion pound takeover bid by Arcapita.
UK utility Severn Trent also added 2.4 per cent on further bid speculation.