* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 up 0.6 pct
* FTSEurofirst 300 moves back up to near 2-month highs
* Vivendi up after Activision deal
* LVMH and Belgacom rise after Q2 updates
* Traders see more small, gradual gains in near-term
LONDON, July 26 (Reuters) - Fresh signs of increased merger and acquisition activity sent European shares heading back towards two-month highs on Friday, with some traders seeing more gradual gains for equities in the near term.
The pan-European FTSEurofirst 300 index was up 0.2 percent at 1,2111.96 points in early trading, while the euro zone's blue-chip Euro STOXX 50 index was 0.6 percent higher at 2,756.92 points.
Andreas Clenow, hedge fund trader and principal of Zurich-based ACIES Asset Management, was putting on 'long' positions to bet on further gains for European equities, which this year have lagged gains in U.S. stocks that are trading at record highs.
"European equity markets may not be as strong as the U.S., but everything looks pretty healthy to me. Things are slowly moving up," he said.
A Paris-based trader said signs of merger activity - notably French group Vivendi's deal to sell 85 percent of its stake in video games maker Activision - would further support stock markets.
"People are now looking for stocks of companies that could become targets, and this will provide support for the market," the trader said.
Heavyweight stock Vivendi rose 2.3 percent while leading French luxury goods group LVMH gained 4.4 percent after reporting higher sales. Both stocks gave the biggest points boost to the FTSEurofirst 300 index due to their large market capitalisations.
Belgium's main telecoms operator Belgacom was the top stock on the FTSEurofirst 300 index in terms of percentage gains with an 8.7 percent rise after reporting a smaller-than-expected decline in second quarter profits.
Not all of Europe's companies have reassured with their second-quarter earnings reports this month, with engineering group Siemens and chemicals group BASF both issuing profit warnings on Thursday.
However, according to data from Thomson Reuters StarMine, the majority of European companies to have posted results so far have either beaten or met market forecasts.
Out of the companies on the pan-European STOXX 600 index , 60 percent have beaten or met forecasts with their second-quarter numbers while 40 percent have missed forecasts, according to the StarMine data.
Exane BNP Paribas strategists said that even though corporate earnings looked better in the United States, the momentum was slowly shifting towards Europe.
"The beat ratio may be better, earnings revisions trends may be stronger, but the consensus still reflects a belief that European earnings growth will be stronger than the U.S. over the next couple of years. We agree," they wrote.