London - European shares rose on Tuesday, buoyed by new signs of corporate takeover activity, with agrochemicals company Syngenta surging on a media report that peer Monsanto had considered buying it.

The pan-European FTSEurofirst 300 index rose 0.2 percent to 1,391.68 points, recovering from a 0.5 percent decline in the previous session and putting the index back in striking distance of last week's 6-1/2 year high of 1,399.62.

Swiss group Syngenta rose 5.7 percent following a Bloomberg report that Monsanto may bid.

A spokesman for Syngenta was not immediately available for comment.

Mark Burgess, chief investment officer at Threadneedle Investments, said that a pick-up in mergers and acquisition (M&A) activity would keep the region's stock markets buoyant.

“Our outlook for equity markets for the remainder of the year is positive. M&A has made a welcome return in recent months,” said Burgess.

Syngenta's gains enabled Switzerland's main SMI equity index to rise by 0.5 percent, beating gains of 0.2 percent on Germany's DAX equity index and a rise of 0.4 percent on France's CAC-40.

The FTSEurofirst 300 index has risen by about 6 percent since the start of 2014, while the DAX has hit record highs and is up by about 4 percent.

Although European stock markets have edged back from those highs over the last week, partly due to a rise in the price of oil following violence in Iraq, many traders and investors expect further gains for stock markets for the rest of the year.

“Equities remain the asset class of choice,” Union Bancaire Privee chief economist Patrice Gaultry said. - Reuters