Nokia sale boosts European shares to 1-week high
* FTSEurofirst 300 index rises 0.2 percent * Nokia surges on Microsoft's move to buy phone business * Syrian tensions keep gains in check By Atul Prakash LONDON, Sept 3 (Reuters) - A 40 percent surge in Nokia boosted technology shares on Tuesday, helping European equities to a one-week high after Microsoft said it would buy the Finnish company's phone business. The STOXX Europe 600 Technology index rose 2.9 percent after the 5.44 billion euro ($7.2 billion) deal. "We are in an environment of growing merger fantasy for sure as economic conditions are improving, companies are cash-rich and interest rates are very low," Christian Stocker, equity strategist at UniCredit in Munich, said. "I see more mega deals taking place in the fourth quarter." The Nokia transaction followed Verizon Communications' move on Monday to buy Vodafone out of their U.S. wireless business for $130 billion. The scale of Nokia's gains was fuelled by the large number of investors who had the firm's shares to sell in the hope of more price falls, but who were then forced to buy them back after the deal to limit losses. Markit data showed that of the shares available to be borrowed, 66 percent were out on loan. The deal marks the exit of the 150-year-old company from the global cellphone market it once dominated. Its current market capitalisation of roughly $15 billion is a fraction of the peak of around $250 billion it reached in 1999-2000 during the height of the tech sector boom. Mirabaud Securities analyst Susan Anthony said Nokia should be able to resist a full takeover attempt, as Finland would not be keen to see one of its national champions disappear. "Nokia should be able to stand on its own two feet, now that it's more focused, profitable and cash-generative." The transaction drove gains in the FTSEurofirst 300 index of top European shares, which at 1037 GMT was up 0.2 percent at 1,219.62 points. Gains were capped by reports saying Russian radar detected the launch of two ballistic "objects" towards the eastern Mediterranean, adding to investor jitters about the Syrian crisis. The index saw a choppy morning session, falling as much as 0.7 percent after the reports, having earlier risen to 1,220.88, its highest level in a week. Shares have risen recently on expectations a strike against Syria could be delayed for at least a week as the U.S. administration had yet to persuade Congress to back its plans. "If there is an escalation of tension, then one can expect to see a big degree of risk off in the market," IG analyst Brenda Kelly said.