LONDON, March 27: European stock markets rebounded slightly on Tuesday, helped by fresh takeover talk and following a late recovery on Wall Street overnight, dealers said.

Frankfurt's DAX 30 won 0.37 per cent to 6,854.30 points, while in Paris the CAC 40 was flat at 5,576.55 in early afternoon trade.

The DJ Euro Stoxx 50 index of eurozone blue chip shares increased 0.16 per cent to 4,148.54 points.

US shares had closed mixed on Monday after a government report showed new home sales dived to a near seven-year low last month, spelling further bad news for the troubled housing sector.

The data hit also European shares, leading to Paris and Frankfurt indices closing down more than one per cent on Monday.

In London, clothing retailer Next jumped to the top of the FTSE 100, winning 3.59 per cent to 2,308 pence on talk of an imminent 2,500 pence per share bid approach, dealers said.

Elsewhere, miners rallied on sector consolidation hopes and a spike in commodity prices. BHP Billiton rose 1.26 per cent to 1,123 pence and Anglo American climbed 1.18 per cent to 2,648 pence.

On Monday Anglo-Swiss mining group Xstrata agreed to buy LionOre Mining International Ltd, a Canadian nickel and gold miner, for 4.0 billion dollars.—AFP