(updates with full report)
PARIS (AFX) - Shares closed higher as some investors returned to the market in search of bargains in the wake of the sell-offs seen in recent sessions, dealers said.
The main CAC-40 index closed 83.84 points or 1.79 pct higher at 4,768.18, off a high of 4,785.59, on trading volume of 5.12 bln eur.
Of the CAC-40 stocks, 37 closed up and 3 were down.
On the Matif, June CAC-40 futures were trading 83.5 points higher at 4,770.0.
On the broader indices, the SBF-80 closed up 92.29 points or 1.73 pct at 5,412.66, while the SBF-120 index closed up 60.49 points or 1.78 pct at 3,451.88.
The euro was quoted at 1.2634 usd, against 1.2645 usd late yesterday.
Arcelor led the rally among French bluechip stocks, closing up 1.60 eur or 4.98 pct to 33.70 amid developments in the battle over the future of the steel group.
Representatives of Arcelor and hostile suitor Mittal Steel met yesterday to discuss Mittal's industrial plan for a merged company, but discussed nothing other than technical details of the valuations, both companies said.
Also, France's association of minority shareholders (ADAM) is planning a legal challenge in the Luxembourg courts to force Russia's Severstal to make a full bid for Arcelor, that would be subject to shareholder approval.
Saint-Gobain climbed 2.29 eur or 4.67 pct to 51.35, benefiting from an upgrade to 'outperform' from 'neutral' at Exane BNP Paribas, after the company reaffirmed its full-year guidance at yesterday's AGM.
Other construction stocks recovered from heavy losses in recent sessions, Lafarge gained 3.55 eur or 4.19 pct to 87.60, Vinci ended up 2.20 eur or 3.10 pct at 73.25 while on the second line Eiffage surged 3.95 eur or 7.05 pct to finish at 59.95.
EADS recouped part of yesterday's losses, up 0.84 eur or 3.27 pct at 26.55.
BAE Systems is exercising a put option that obliges EADS to buy its 20 pct stake in Airbus. Meanwhile, orders for A350 planes from Russia and Qatar appear less certain than previously due to a redesign that could entail major delays in deliveries.
Suez shares climbed 0.84 eur or 2.78 to 31.04. Prime Minister Dominique de Villepin said he is 'determined to proceed' with the plan to merge Suez with Gaz de France, and intends to present the plan for approval by Parliament 'before the end of June'.
This is in the face of mounting political opposition to the merger on the grounds that it would privatise GDF by reducing the government's stake to slightly more than a third of the merged entity.
Accor closed up 1.07 eur or 2.51 pct at 43.75, as it began to sell off a 22.9 pct stake in Club Mediterranee.
Club Med shares finished down 2.70 eur or 6.01 pct at 42.20.
Market heavyweight Total added 0.90 eur or 1.89 pct to 48.42 as oil prices firmed after yesterday's slide.
Prospects were also boosted for oil sector service companies on the second line. Vallourec rose 35.50 eur or 4.47 pct to 830.50, Technip added 1.00 eur or 2.45 pct to 41.75 and Geophysique added 3.20 eur or 2.57 pct to 127.60.
On the downside, Pernod Ricard lost 0.20 eur or 0.13 pct to 149.60, Veolia Environnement dropped 0.03 eur or 0.07 pct to 43.17, while France Telecom closed down 0.05 eur or 0.29 pct at 17.25 in the wake of reports that the company is in exclusive talks with American fund Carlyle Group to buy Austrian wireless telecom operator One for an estimated 1.5 bln eur.
To help finance the acquisition, France Telecom announced that it plans to dispose of all or part of its 54 pct stake in directory operator PagesJaunes. PagesJaunes stock was up 0.04 eur or 0.17 pct at 23.04,
Elsewhere on the second line, Euronext added 0.85 eur or 1.22 pct to 70.35, amid speculation that Deutsche Boerse might raise its cash offer for Euronext.
PagesJaunes closed down 0.11 eur or 0.48 pct at 22.89. paris@afxnews.com rg/cml COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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