LONDON - European stock markets closed higher Tuesday, led by London after dealers returned from a long holiday weekend and buoyed by a modest Wall Street opening rally ahead of a US interest rate decision.
The London FTSE 100 index rose 1.24 percent to 4,861.2 points, the Frankfurt DAX 30 climbed 0.51 percent to 4,245.54 points and in Paris the CAC 40 gained 0.44 percent at 3,955.93.
The DJ Euro Stoxx 50 index of leading eurozone shares advanced 0.46 percent to 2,962.59 points.
The euro stood at 1.2892 dollars.
On Wall Street, by London's close, the Dow Jones Industrial Average was 6.80 points firmer at 10,268.50, while the Nasdaq composite index was up 6.07 points at 1,934.72 helped by easier crude prices in volatile trading ahead of the Federal Open Market Committee's widely expected announcement of a quarter-point hike.
"Investors have adopted a wait-and-see attitude ahead of the FOMC, waiting more particularly for the press release that could have negative repercussions on the markets," IXIS analysts said in Paris.
In London, two days before Britons vote in a general election, investors focused on takeover speculation and broker comments, dealers said.
Kingfisher, Europe's largest home improvement retailer, jumped 3.36 percent to 253.75 pence after a weekend report that chief executive Gerry Murphy last week held talks with US cousins Lowe's and Home Depot.
It comes amid speculation about the British giant's future after it recently issued a warning on the group's anticipated profits.
Nick Bubb, analyst at Evolution Securities, said a bid battle could materialise, advising clients that "if Kingfisher is now in play, it will go out at well over 300 pence".
Meanwhile Rolls-Royce flew 3.16 percent higher to 244.50 pence after Credit Suisse First Boston upgraded its rating on the stock to "outperform" from "neutral", with an unchanged target price of 270 pence.
The broker said it believed the British aerospace giant's recent weak share price had taken the stock to an attractive level.
Energy giant Royal Dutch/Shell nudged up 0.32 percent to 471 pence after announcing a long-term deal with Libya to explore for gas in the north African country.
In Frankfurt, German luxury car maker BMW won 0.49 percent to 33.14 euros, although it said that bottom-line earnings slipped in the first quarter due to the strong euro, higher raw materials prices and fiercer competition.
Commerzbank, Germany's third-biggest bank, was the biggest DAX decliner, slumping 3.87 percent to 16.40 euros, after reporting mixed results.
In Paris, steelmaker Arcelor rose 1.42 percent to 15.66 euros after it reported a surge in gross operating profit to 1.697 billion euros in the first quarter from 696 million a year earlier -- beating analysts' forecasts.
The Swiss Market Index edged up 0.15 percent to 5,933.74 points.
The Amsterdam AEX added 0.20 percent at 349.08, the Madrid Ibex-35 rose 0.53 percent to 9,168.3 and the Milan SP/Mib climbed 0.24 percent to 31,224.0. In Brussels, the Bel-20 fell 0.07 percent to 3,046.41.
Hong Kong's key Hang Seng Index closed down 0.11 percent at 13,893.98 points amid caution ahead of the US Federal Reserve meeting, dealers said.
Tokyo's markets were shut until Friday because of a three-day public holiday.
05/03/2005 18:44 GMT