ABN Amro rallied, leading the banking sector higher as it rose 7.9% on speculation that Barclays might offer about 60 billion euros for Amsterdam- based ABN Amro. Other banks also gained. BBVA shares rose 1.3%, BNP shares added 1.3% and ING shares increased 1.2%. The tobacco sector was also in the M&A spotlight as Franco-Spanish tobacco firm Altadis rejected a 45-euro-a-share bid from Imperial Tobacco of the UK. Altadis surged 5.9%.

Travel stocks were also higher, with shares in TUI of Germany up 7.7% after it agreed to merge its tourism operations with U.K.-based First Choice Holidays. Deutsche Postbank shares gained 3.1% in Frankfurt after it reported higher profit for 2006. Auto maker DaimlerChrysler rose 2.4% after it was upgraded to neutral at Goldman Sachs.

Vinci SA gained 2.4%. French billionaire Francois Pinault is reported to ally with the Mittal group as he seeks to buy a majority stake in Vinci, La Lettre de l''''Expansion said, citing unidentified U.S. investors.

Prudential Plc, British insurer, rallied 3.3% after the Observer yesterday reported an activist hedge fund is building a stake in the company, increasing speculation the company could be pressured to break itself up.

Decliners

Imperial Tobacco was the only notable decliners, down 1.5% in London.

Commodities

Gold climbed for a fourth consecutive session on speculation slowing U.S. economic growth and quickening inflation will raise investor demand for the metal as an alternative to U.S. stocks and bonds. Gold for immediate delivery rose $1 to $654.40 an ounce in early trade in London. Silver declined 1 cent to $13.15 an ounce.

Platinum climbed $8.50 to $1,225.50 an ounce and palladium advanced $2 to $352 an ounce. Copper declined on speculation a rise in Chinese interest rates will slow growth in demand for the metal used in plumbing and electrical cables. Copper for delivery in three months on the London Metal Exchange fell $90, or 1.4%, to $6,520 a metric ton. Nickel slipped after LME-monitored stockpiles rose for the first day in five. Inventories increased 138 tons, or 3.9%, to 3,702 tons. Aluminum fell $21 to $2,793 a ton, zinc declined $55 to $3,195 and lead dropped $26 to $1,900.

Crude oil fell near a six-week low in New York because some analysts and traders are concerned world economic growth will slow, cutting demand for fuel. Crude oil for April fell as much as 44 cents, or 0.8%, to $56.67 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude for May settlement in London fell less than New York West Texas Intermediate, dropping l 9 cents to $60.21 a barrel in electronic trading on London ICE Futures exchange.

Currencies

The U.S. dollar was mixed against other major currencies in European trading Monday morning. The euro traded at $1.3287, down from $1.3310 late Friday in New York. The British pound traded at $1.9428, up from $1.9421. The dollar bought 117.35 Japanese yen, up from 116.74.