* FTSEurofirst 300 index up 0.1 percent
* Healthcare firms gain; banks slip
* Caution lingers ahead of euro zone rescue fund discussion
By Harpreet Bhal
LONDON, Jan 17 (Reuters) - European shares edged up on
Monday, with gains in healthcare stocks just offsetting weak
banks in cautious trade ahead of a meeting of finance ministers
to discuss changes to euro zone's rescue fund.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.1 percent higher at 1,156.94 points, in
relatively low volumes with U.S. markets closed for a holiday.
Gains in healthcare stocks gave some strength to the index,
with Smith & Nephew <SN.L> up 3.5 percent after a weekend
newspaper report that Johnson & Johnson <JNJ.N> was considering
a fresh takeover approach for the artificial knee and hip maker
worth at least 800 pence a share. []
Weak banks capped further gains in the index ahead of the
outcome of the euro zone finance ministers meeting later on
Monday. Peripheral euro zone banks Banco Santander <SAN.MC>,
National Bank of Greece <NBGr.AT> and BBVA <BBVA.MC> were down 1
to 1.6 percent.
The finance ministers are set to discuss changes to the
effective lending capacity of the European Financial Stability
facility (EFSF), though no final decision was expected, with
Germany seeing no urgent need to boost the fund's size.
[]
"It would be good for the euro zone as a whole if they (the
ministers) can calm some of the nerves but by what actions? We
will have to live with discussions about the debt problems for
months and quarters to come," said Heinz-Gerd Sonnenschein,
equity markets strategist at Deutsche Postbank in Bonn.
Germany is pushing for broader anti-crisis measures to be
agreed at an EU summit in March and senior European sources said
the sense of urgency in Berlin for boosting the fund had
diminished after successful bond auctions last week in Spain and
Portugal.
M&A BOOSTS SMITH'S
Merger and acquisition (M&A) hopes also helped British
engineering firm Smith's Group <SMIN.L> rise 7.7 percent after
it rejected a 2.45 billion pounds ($3.9 billion) bid approach
for its medical services unit, which a person familiar with the
matter said came from buyout firm Apax. []
Analysts remained upbeat on the near-term prospects for
equities and expected sound fundamentals and strong corporate
profits this season to attract investors.
"We have seen a reasonable amount of sell-offs already this
year, and these have ultimately been pounced on by the bargain
hunters keen to jump on board the market's medium-term positive
trend," said David Jones, chief market strategist at IG Markets.
Among the gainers, SGS <SGSN.VX> rose 2.3 percent after the
world's largest inspection services company raised its dividend
and said it saw stronger top-line growth this year after demand
for its minerals and consumer testing services picked up in
2010. []
On the downside, Swiss luxury goods group Richemont <CFR.VX>
fell 2 percent after it said the strong Swiss franc and higher
year earlier comparative figures would weigh on its fourth
quarter results. []
Norway's Telenor <TEL.OL> fell 1.9 percent after the firm
and partner Altimo squared up for yet another battle over a
proposed bid by their Russian mobile phone firm Vimpelcom for
Egyptian tycoon Naguib Sawiris' telecoms assets. []
Across Europe, France's CAC-40 <> and Britain's FTSE
100 <> shed 0.2 and 0.3 percent respectively, while
Germany's DAX <> was flat.
(Editing by Jane Merriman)
