European stocks rise

European stocks moved higher Friday, with the insurance sector leading from the front amid speculation that Axa SA is exploring a takeover of its domestic peer CNP Assurances.

Mining shares rose alongside the price of copper and zinc, while HSBC raised its recommendation on Anglo American.

The Dow Jones stoxx 600 Index rose 1.7 percent to 357.74. In terms of national markets, the U.K.'s FTSE 100 Index added 1.7 percent to 6262.10, while France's CAC-40 Index jumped 1.9 percent to 5521.17. Germany's DAX Index advanced 0.6 percent to 7608.96.

Stocks closed out the week on a positive note, but analysts and strategists were quick to point out that worries remain about whether slowing growth will erode corporate earnings.

"We think the world can muddle through, although the chances of a U.S. recession are clearly rising as the credit crunch widens and deepens," said Neil Dwane, who helps manage US$157.3 billion (euro105.9 million) as chief investment officer for Europe at RCM Ltd. in Frankfurt.

Merger and acquisition fever gripped the insurance sector after French newspaper Les Echos said insurance giant Axa is looking at a takeover of CNP Assurances.

The main shareholders of CNP Assurances however jointly said they aren't interested in selling their stakes in the company.

The news nonetheless sent CNP 11 percent higher , while Axa advanced 4.3 percent. In terms of the broader sector, ING Groep rose 3.4 percent and Munich Reinsurance jumped 0.9 percent.

Mining stocks racked up gains as the price of copper and zinc pressed higher.

Three-month copper last traded at US$6,655 a metric ton, up US$90 a ton from the London Thursday afternoon kerb, while zinc was US$24 a ton higher at US$2,319.

An HSBC upgrade of Anglo American, to overweight from neutral rating, also helped shore up sentiment.

Anglo American raced up 6.1 percent, while Antofagasta climbed 7.1 percent. Vedanta Resources added 7.2 percent.

HSBC shares rose 1.2 percent. Chairman Stephen Green said that markets remain difficult in the U.S. but that his bank isn't looking to pull out of the country. He said, though, that HSBC isn't planning any major banking acquisitions in that country.

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Tim Falconer is a correspondent for Dow Jones Newswires