* FTSEurofirst 300 index gains 0.7 pct
* Drugmakers advance, Elan leads the sector
* Banks broadly higher, but UBS down 1.7 percent
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, June 29 (Reuters) - European equities rose early on
Monday, with Irish drugmaker Elan leading the sector on reports
Novartis <NOVN.VX> was in talks to buy parts of the company,
while commodity shares tracked firmer metals and crude prices.
At 0827 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.7 percent at 850.29 points after
falling in the previous two sessions. The index, which slumped
45 percent in 2008, has jumped 31 percent since falling to a
lifetime low in early March.
Elan <ELN.I> rose 6.6 percent after the Sunday Times
newspaper said that Novartis was in talks to buy parts of Elan,
including its flagship multiple sclerosis products and its
Alzheimer's disease pipeline. Novartis was down 0.3 percent.
A spokeswoman for Elan said it did not comment on
speculation. A spokesman for Novartis declined to comment.
Novo Nordisk <NOVOb.CO> gained 4.4 percent, clawing back
most of last week's losses, on expectations that sales of its
modern insulins will benefit from concerns over the safety of
Sanofi-Aventis's <SASY.PA> rival product Lantus.
Sanofi rose more than 1 percent, levelling out after
plunging last week on concerns about imminent new research
findings on Lantus and cancer. Details of four European trials
highlighting a possible link were made public after the market
close on Friday.
But despite Monday's gains, the European index is on track
to close the month in a negative territory after advancing in
the previous three months.
"It's quite clear that we have lost momentum over the last
week or so. The strong rally that we saw in cyclicals through
the early part of the second quarter has started to fade," said
Darren Winder, head of macro and strategy research at Cazenove.
"But I don't think this is the beginning of a downward trend.
The markets are basically in a trading range at the moment and
are looking for signs of economic recovery. And those signs are
not going to be there in a very visible way until the autumn."
UBS <UBSN.VX> fell 1.7 percent. The bank is to pay 3 billion
to 5 billion Swiss francs ($2.77-$4.62 billion) in the next two
weeks to settle a U.S. tax probe into the bank, Swiss newspaper
Sonntag reported. []
Other banks were broadly higher. Barclays <BARC.L>, Lloyds
<LLOY.L>, Royal Bank of Scotland <RBS.L> and Societe Generale
<SOGN.PA> were up 0.3-3.2 percent.
Energy stocks were among top gainers on the index as they
tracked firmer crude oil prices <CLc1>. BP <BP.L>, Royal Dutch
Shell <RDSb.L>, BG Group <BG.L>, Repsol <REP.MC>, Total
<TOTF.PA> and StatoilHydro <STL.OL> added 0.6-1.7 percent.
Miners got strength from a 1.2 percent rise in copper prices
and a 1.3 percent increase in nickel prices. BHP Billiton
<BLT.L>, Antofagasta <ANTO.L>, Rio Tinto <RIO.L>, Xstrata
<XTA.L> and Eurasian Natural Resources <ENRC.L> rose 0.3-2.2
percent.
Anglo American <AAL.L> was up 0.4 percent. The Sunday
Telegraph reported that the miner was building its defences
against a 41 billion pound ($67.74 billion) merger approach from
Xstrata <XTA.L> by plotting talks about a major Chinese
investment. []
Across Europe, UK's FTSE 100 index <>, Germany's DAX
<> and France's CAC 40 <> were up 0.5-0.6 percent.
(Editing by Mike Nesbit)
