LONDON, March 29: European stock markets rallied on Thursday, as oil prices cooled and amid fresh takeover talk and positive company earnings, dealers said. In late morning trading, London's FTSE 100 rose by 0.60 per cent to 6,304.80 points. Frankfurt's DAX 30 index of leading shares climbed 0.73 per cent to 6,866.72 points and in Paris the CAC 40 dropped 0.81 per cent to 5,597.80 in early afternoon trade.

The DJ Euro Stoxx 50 index of eurozone blue chip shares advanced 0.75 per cent to 4,159.06 points at the half-way stage.

In London Tate & Lyle headed the FTSE 100 in morning trade, jumping 6.06 per cent to 577.5 pence after the sugar manufacturer said its trading data was in line with market expectations.

Compass also rose strongly, winning 5.39 per cent to 337.25 pence, as a better-than-expected update from the world's biggest catering company added to fresh rumours of predatory interest from a financial buyer in the Middle East.

In Madrid, Altadis gained a modest 0.73 per cent to 48.10 euros, as takeover talk surrounding the Franco-Spanish tobacco group intensified. Madrid's IBEX-35 index climbed 0.44 per cent to 14,547.40 points.

The Times of London had reported British American Tobacco was thought to be in talks with CVC Capital, Cinven and PAI over a possible bid for Altadis.

BAT won 1.85 per cent to 1,599 pence and Imperial Tobacco climbed 1.52 per cent to 2,278 pence in London.

In New York on Wednesday, the Dow Jones Industrial Average closed down 0.78 per cent at 12,300.36 points. The Nasdaq composite finished 0.83-per cent lower at 2,417.10 points and the broad-market Standard and Poor's 500 dropped 0.80 per cent to 1,417.23.

Hong Kong's key Hang Seng Index rose 1.37 per cent to 19,821.78 points on a technical rebound after two days of falls, with CNOOC and China Unicom posting steep gains ahead of their 2006 results, dealers said.—AFP