European shares rise early, driven by miners, M&A

                                
 By Sitaraman Shankar
                                
 LONDON, April 7 (Reuters) - European shares rose 1 percent
early on Monday, building on the previous session's gains, as
acquisition talk returned to boost markets and miners got a lift
from a bullish note from Goldman Sachs.
                                
 At 0826 GMT, the FTSEurofirst 300 index <.FTEU3> of top
European shares was up 1.1 percent at 1,332.90 points.
                                
 Nestle <NESN.VX> rose 2.6 percent after striking a deal to
sell its 77 percent stake in U.S. eyecare group Alcon <ACL.N> to
Swiss peer Novartis <NOVN.VX> for $39 billion, while Novartis
fell 0.7 percent.
                                
 Cosmetics group L'Oreal <OREP.PA> gained from the deal,
rising 3 percent on speculation that Nestle would use proceeds
from the sale to raise its stake in the group, traders said.
Earlier, Nestle said it would not decide on its L'Oreal stake
before next year.
                                
 Embattled Swiss bank UBS <UBSN.VX> jumped 5.8 percent to top
gainers in Europe after a Merrill Lynch upgrade, while British
Energy rose 3.7 percent on a newspaper report that Centrica had
launched talks with France's EDF <EDF.PA> over a joint bid for
it.
                                
 Centrica, which rose 2.3 percent, and EDF, which gained 0.3
percent, declined comment, while British Energy was not
immediately available.
                                
 "There's some optimism in the short term for equities," said
Thierry Lacraz, strategist at Swiss bank Pictet.
                                
 "This is a technical rebound, which may last one or two
months, and we may retest the 200-day moving average on the DJ
Stoxx 50 <.STOXX50>, which could mean a 10 percent upside. But
by no means is the bear market over."
                                
 Lacraz said investors were taking heart from the fact that
no large U.S. bank had collapsed as a result of the global
credit crisis, and were reassured by the response of the U.S.
Federal Reserve to the situation.
                                
 Across Europe, Britain's FTSE 100 <.FTSE> gained 0.6
percent, Germany's DAX <.GDAXI> rose 1 percent and France's CAC
<.FCHI> rose 0.9 percent.
                                
 
                                
 APRIL SUNSHINE
                                
 Anglo American <AAL.L>, BHP Billiton <BLT.L>, Vedanta
<VED.L>, Kazakhmys <KAZ.L>, Antofagasta <ANTO.L> and Rio Tinto
<RIO.L> all notched up gains of 2 to 4 percent, with the sector
driven by a positive note from Goldman Sachs.
                                
 European shares have risen 5.2 percent so far this month,
having enjoyed their best week in over a year last week, but the
gains came after the worst quarter in more than five years.
                                
 The FTSEurofirst 300 has fallen 19 percent from hitting a
multi-year high in July last year, taken down by a crisis in
credit markets stemming from a collapse in subprime or risky
U.S. mortgages.
                                
 Financials have been the worst sufferers, with UBS losing 32
percent this year to follow a 30 percent loss during the whole
of last year.
                                
 (editing by Elizabeth Fullerton)