* FTSEurofirst 300 up 0.9 pct, Euro STOXX 50 up 0.7 pct
* AstraZeneca jumps 7.4 pct on M&A talk
* Philips drops 6.7 pct after disappointing earnings
By Blaise Robinson
PARIS, April 22 European shares rose in early
trade on Tuesday as mergers and acquisitions activity in the
pharma sector helped the market extend last week's gains and
eclipse disappointing results from Dutch conglomerate Philips
Shares in the healthcare, lighting and consumer appliances
group tumbled 6.7 percent after reporting a bigger-than-expected
fall in quarterly operating profit and warning of a challenging
2014, blaming unfavourable exchange rates and slowing demand for
medical equipment in China and Russia.
"Behind the M&A noise, the earnings picture in Europe has
not been very rosy so far," said Alexandre Baradez, chief market
analyst at IG France.
"The market needs a real positive catalyst, such as a good
string of corporate results or pro-active measures from the
European Central Bank, otherwise this month's pull-back will
At 0743 GMT, the FTSEurofirst 300 index of top
European shares was up 0.9 percent at 1,340.18 points. The index
has gained about 3 percent since mid-April, but is still down
about 1 percent from a near six-year high hit in early April.
The euro zone's blue-chip Euro STOXX 50 index
added 0.7 percent, to 3,175.96 points.
Shares in AstraZeneca's surged 7.4 percent - by far
the top gainers among European blue chips - after Britain's
Sunday Times reported that U.S. pharmaceutical major Pfizer
has approached its British rival to propose a 60 billion
pound ($101 billion) takeover.
"(An) AstraZeneca acquisition would fit Pfizer's key
strategic goals for immunotherapy and autoimmune disease,"
Citigroup analysts wrote in a note.
"Most importantly, we believe that Pfizer has recognised
that the commercial potential for cancer immunotherapy is
materially higher than market estimates."
Also in the pharma sector, Swiss drugmaker Novartis
rose 2.5 percent after unveiling plans to transform
its business by exchanging certain assets with GlaxoSmithKline
and divesting its animal health business to Eli Lilly
in deals worth billions of dollars.
GlaxoSmithKline's shares were up 4.3 percent.
The STOXX Europe 600 health care index was up 2.5
percent, with other majors such as Sanofi up 1.8
percent. The sector index is up 5.5 percent so far this year,
outpacing the broad market, with the FTSEurofirst 300 up 1.7
percent in 2014.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Alison Williams)