European shares rose on Monday, boosted by M&A activity in the pharmaceutical sector and rallying from near two-month lows after their biggest weekly loss in four months.
UK-listed pharmaceutical Shire rose 2.6 per cent after it said it was ready to recommend a new £53.20 per share offer from US firm AbbVie.
Shares in Shire touched an all-time high of £50.45.
“AbbVie are coming in at a decent level,” said Manoj Ladwa, head of trading at TJM Partners.
“It’s attractive to Shire shareholders and I think they’ll take it - AbbVie sounded their key shareholders out and I think a fair level has been reached.”
The pan-European FTSEurofirst 300 was up 0.7 per cent at 1,361.91 by 0813 GMT having fallen 3 per cent last week - its biggest drop since March.
Portugal's biggest listed bank Banco Espirito Santo was down 2.3 percent.
The stock has fallen nearly 40 per cent in five days, and was at the centre of global market jitters late last week after the disclosure of financial irregularities at a web of family-held holding companies behind the lender.
Portuguese blue chip shares rose 1.3 per cent, recouping part of a 10 per cent fall last week, with traders saying contagion from BES to the rest of the market was limited.
Credit Suisse remained underweight Portuguese equities despite a broadly positive view of peripheral Europe, citing its private sector debt levels, which are the highest of any developed nation, poor economic momentum and risk of deflation.
The investment bank cuts its overweight in continental Europe to 8 per cent from 13 per cent, saying that economic data was poor and the short-term outlook for earnings worse.
"However, over the next 3 years, our base case forecast is for 39 per cent (earnings) growth, higher than our US forecast of 28," analysts at Credit Suisse said in a note, saying that should economic data get much worse, the European Central Bank would implement a quantitative easing asset purchase programme.
Reuters
