* FTSEurofirst 300 index closes 0.2 pct higher
* Intercontinental Hotel Group gains on M&A talk
* ARM advances on positive broker note
By Atul Prakash
LONDON, May 27 European shares rose to
multi-year highs on Tuesday, bolstered by U.S. economic data,
mergers and acquisitions talk and expectations of more policy
easing by the European Central Bank.
New economic numbers showed orders for long-lasting U.S.
manufactured goods unexpectedly rose in April, home prices
advanced more than expected in March and consumer confidence
rose to near its highest since 2008.
In addition, on Monday ECB chief Mario Draghi suggested once
again that the central bank will cut euro zone interest rates
next week. Other policymakers drove home the message on Tuesday.
Acquisition talks also helped the market. The STOXX Europe
600 Travel and Leisure index closed up 1.2 percent after
climbing to its highest since 2007, as Intercontinental Hotel
Group gained on media reports of interest from an
unidentified bidder in the United States.
Intercontinental Hotel, or IHG, rose 3.4 percent to feature
among the top performers on the FTSEurofirst 300 index.
The index closed 0.2 percent higher at 1,378.82 points after
climbing to its highest since early 2008. In the United States,
the S&P 500 index hit a record high.
Sky News, citing unidentified sources, said the hotel group
had rejected a 6 billion-pound ($10.1 billion) takeover offer
from a U.S. bidder on the grounds it was too low. An IHG
spokeswoman declined to comment.
Credit Suisse said in a note that a potential deal could
generate savings of about $50 million annually and there could
be benefits from an altered tax domicile.
French peer Accor, Europe's largest hotel group,
gained 1.3 percent after saying on Tuesday it had agreed to buy
the assets of 97 hotels for about 900 million euros, in a move
the company said would boost earnings.
"We are going to have a sense of normality in 2014 after the
financial crisis, when it was more about defending the balance
sheet," said Lorne Baring, managing director of B Capital Wealth
Management. "We expect more M&As and IPOs and that would be a
bullish indicator for the rest of the year.
"The European stock market's outlook looks positive as there
is some momentum and the European election has passed without
any great surprise. Valuations are still relatively attractive
and dividend yields are quite good."
Among other sharp movers, chip designer ARM rose 4
percent to 917 pence. Traders attributed the move to Numis
Securities' increasing its price target to 920 pence from 880
pence after an upbeat presentation by the company at a briefing
The reopening of British markets after a holiday on Monday
helped support stocks across the continent. The FTSE 100
rose 0.4 percent, while Germany's DAX rose 0.5 percent
after setting a new record high for a second day in a row.
On Monday, the DAX climbed to record high and Italy's FTSE
MIB rose 3.6 percent as strong showings by pro-European
forces in Germany and Italy helped balance Eurosceptic gains in
France, Britain and Greece. The CAC index ended 0.1 percent
higher on Tuesday.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Alistair Smout; Editing by Larry King)