* FTSEurofirst 300 up 0.3 pct after falls on Friday
* High crude prices on unrest in Arab world limit gains
* Bulgari surges as LVMH to take over the company
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, March 7 (Reuters) - European equities edged higher
on Monday, with Alcatel-Lucent <ALUA.PA> leading the technology
shares higher after a broker upgrade, though strong oil prices
on mounting unrest in the Arab world limited market gains.
At 0953 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.3 percent at 1,151.73 points after
falling to a low of 1,143.64 earlier in the session. The index
dropped 0.6 percent on Friday.
Telecom gear maker Alcatel-Lucent rose 3.9 percent as
Berenberg raised the company to "buy" from "sell" and increased
the price target to 4.40 euros from 1.70 euros. The STOXX Europe
600 Technology <.SX8P>, up 0.5 percent, was the top gainer.
But investors remained cautious on concerns that strong
crude oil prices will hurt global economic recovery. There are
worries that a prolonged period of high energy prices could
erode company profits and add to inflationary pressures.
"The market is thinking forward as to what could cause a
disruption to the economic recovery -- be that from high
commodity/oil prices as well as higher interest rates. Both of
those things are clearly headwinds for the economy and the
equity market," said Don Fitzgerald, fund Manager at Tocqueville
Finance.
"Historically, spikes in oil prices which is like an extra
tax on consumption have resulted in a slowdown. You could make
an argument that maybe it's more of a problem for the developing
world, but the volatility that we have seen in the last few
weeks will probably continue for a while."
Crude <CLc1> was up 1.6 percent after hitting a 30-month
high above $106 a barrel on increasing fears that Libya was
heading for a civil war, while clerics in top oil exporter Saudi
Arabia backed a ban on protests. [] []
The U.S. government reiterated that it could tap its
strategic oil reserves in order to safeguard economic growth as
surging gasoline prices increase pressure for action.
"Investors are still nervous. The one thing they hate is
uncertainty and the Middle East situation is providing plenty of
uncertainty," said Keith Bowman, analyst at Hargreaves Lansdown.
"A majority of countries have to import oil. It's a major
cost and a sustained period of elevated oil prices is seen as a
major drag on industries."
BULGARI SURGES
LVMH <LVMH.PA> was flat. Its shares earlier fell 1.7 percent
after the luxury group unveiled a 3.7 billion euros all-share
deal to take over Italy's Bulgari <BULG.MI>, paying a premium of
almost 60 percent for the high-end watches and jewellery maker.
"It's an expensive but high quality deal," one Paris-based
trader said. "The multiples are very high."
Bulgari shares, up 58 percent, were halted from trading for
almost an hour because of excessive gains. Other luxury stocks
also gained on speculation of further consolidation, with Swiss
luxury goods group Richemont <CFR.VX> rising 2.4 percent.
Investors also kept a close eye on the developments in
peripheral euro zone countries. Rating agency Moody's downgraded
on Monday Greece's sovereign rating and assigned it a negative
outlook. []
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC 40 <> were flat to 0.4 percent
higher.
(Editing by Mike Nesbit)
