PARIS May 27 European shares ended higher on Monday, rebounding after a sharp two-session drop, with Fiat surging on speculation the Italian carmaker could soon launch a buyout offer for U.S. unit Chrysler.
Trading volumes were thin, however, as both the UK and U.S. markets remained closed for a public holiday.
The Euro STOXX 50 index provisionally ended 1 percent higher, at 2,793.11 points, after suffering a 2.5 percent drop in two days. Volumes on the euro zone's blue-chip index represented only about 35 percent of its daily average volume of the past three months.
"We shouldn't read too much into today's rise, and I think the pull-back started last week is not over yet," Saxo Banque senior sales trader Alexandre Baradez said.
"However, the medium-term trend is still positive for European stocks, with no big negative catalyst ahead, and with very low bond yields driving more and more investors into equities."
Euro zone banks featured among the biggest gainers, bouncing back after a 5.6 percent slide last week. BNP Paribas gained 1.9 percent and Banco Santander added 1.8 percent.
Fiat gained 4.4 percent, boosted by a press report saying the Italian carmaker is in talks with banks to secure financing for a buyout of U.S. unit Chrysler.
Club Med jumped 23 percent after the French holiday resort operator's top shareholders, AXA Private Equity and Chinese investor Fosun International, unveiled a buyout offer for the firm alongside the company's management.