European shares ended higher on Thursday, as some upbeat U.S. technology-sector earnings prompted investors to push up shares in rival firms such as Capgemini and as deal speculation provided a boost for the chemical sector.
The pan-European Dow Jones Stoxx 600 index ended 0.2% higher at 359.46. Capgemini gave the technology sector a boost. Shares gained 2.7% as investors eyed a 34% rise in first-quarter profit and an upbeat outlook from U.S. consulting firm Accenture Ltd.
Bob Djurdjevic, an analyst at Annex Research, noted Capgemini has been hurt recently by concerns over order growth from the financial-services sector.
"Given (Wednesday's) $5 billion infusion that the Chinese have made into Morgan Stanley, not to mention the strong Accenture and Oracle results, I'd say that Capgemini is also likely to benefit from the calming of the turbulent financial waters," he said in an email.
Other techs that advanced included Misys, up 3.8%, LogicaCMG, which rose 1.8%, and Nokia, which added 2.1%.
Of national indexes, the U.K. FTSE 100 index rose 1% to 6,345.60, the German DAX 30 index climbed 0.4% to 7,869.19 and the French CAC-40 index advanced 0.3% to 5,511.45.
Shares gained momentum on Thursday afternoon after a positive start on Wall Street.
Peter Jarvis, director of European equities at F&C Asset Management, said he believes the market's going to continue to experience sharp moves until the year-end, at least.
"The market's definitely going to be volatile between now and the end of the year," he said. "The fact that liquidity is being pumped in (by central banks), hasn't really sorted things out in the short term," he said.
The European Central Bank injected over $500 billion in two-week funding earlier this week, and the U.S. Federal Reserve and the Bank of England also have injected funds into the banking system through a coordinated central-bank plan.
Still, Mr. Jarvis said he's not a big seller of the market.
"The macro backdrop is not the best but corporate balance sheets are strong and valuations are not high. We've also got yield and merger-and-acquisition support on top of that," he added.
Some of the sharpest gains came from chemical firms.
Shares of Johnson Matthey /zigman2/quotes/207054035/delayed UK:JMAT +0.85% led the sector higher, up 5.3%. The share gains for the platinum specialist followed a report in the Financial Times suggesting Dow Chemical may make an offer.
The newspaper also reported that Belgium's Umicore may be a target for Dow Chemical. Umicore shares rose 9%. Other sector gainers included Arkema, up 2.7% and Yara, up 4.8%.
More deal news came from the Spanish media sector after Promotora de Informaciones said it plans to launch a €3.9 billion buyout bid for television broadcaster Sogecable .
Shares in Promotora de Informaciones /zigman2/quotes/201838785/composite PRS -0.76% rose 4.6% and Sogecable shares climbed 3.6%.
In France, telecoms and media giant Vivendi said that SFR, its mobile-phone division, is planning to launch a bid for Neuf Cegetel after agreeing to buy out the firm's second-biggest shareholder.
Neuf Cegetel shares lost 4.7% after gaining strongly recently, while Vivendi shares ticked up 0.6%.
In London, shares in cruise operator Carnival Corp. /zigman2/quotes/210414141/delayed UK:CCL +5.68% gained 1.3%.
The firm reported higher-than-forecast fourth-quarter earnings per share of 44 cents after posting an 11% rise in revenue to $3.12 billion. Advance bookings for the first half of 2008 are well ahead of last year, Carnival said.
Shares of broadcaster ITV /zigman2/quotes/205378065/delayed UK:ITV +2.10% climbed 1.7% after the U.K.'s Competition Commission proposed that satellite broadcaster British Sky Broadcasting should cut its stake in ITV to below 7.5%.
BSkyB shares slipped 1.1%. BSkyB is 39% held by News Corp., which owns MarketWatch, the publisher of this report.
The competition regulator said BSkyB's current 17.9% stake in its rival "may be expected to operate against the public interest," by reducing competition between the companies.
Sarah Turner at MarketWatch contributed to this article.