European shares edged higher in Monday's holiday-shortened session, led by the banking sector
and by fresh merger speculation surrounding France's Capgemini.
Capgemini shares rallied by more than 9 percent after India's Hindustan Times newspaper quoted unidentified sources as saying that Wipro is expected to bid for the computer services group by the end of January.
A spokeswoman for Capgemini declined to comment.
The FTSEurofirst 300 index of top European shares ended up 0.1 percent at 1,508.93 points. Advancing issues outnumbered decliners by about 4 to 1.
A report in the Financial Times that Saudi Arabia plans to establish a sovereign wealth fund that may exceed $900 billion, which would likely be the largest in the world, gave banking
stocks a boost.
Barclays rose 2.4 percent, while Royal Bank of Scotland gained 1.8 percent, Societe Generale rose 0.2 percent and Dexia added 1.7 percent.
Around Europe, UK's FTSE 100 index was up 0.7 percent and France's CAC 40 rose 0.2 percent.