European stock markets have climbed, with takeover talk powering share prices in London, and strong Alstom results underscoring Paris gains, dealers said.

The British capital's FTSE 100 index of leading shares added 0.45 percent to 6,236.20 points, in Paris the CAC 40 won 0.67 percent to 5,484.16 and Frankfurt's DAX 30 index gained 0.54 percent to 6,391.79 points.

The DJ Euro Stoxx 50 index of top eurozone shares climbed by 0.56 percent to 4,086.53 points.

The euro stood at 1.2850 dollars on Monday.

Iberdrola, the second-biggest Spanish power company, had said late on Friday that it was in talks with Scottish Power over a possible merger between the two companies.

Iberdrola could pay 12.0 billion pounds (17.8 billion euros, 22.9 billion dollars) for the group, according to weekend newspaper reports.

In early trading on Monday, Scottish Power shares surged by 2.56 percent to 760 pence in London.

However in Madrid, Iberdrola sank 1.81 percent to 34.11 euros, while the Ibex-35 shares index rose 0.49 percent to 14,071.00 points.

In Paris, Alstom saw its shares rocket 4.42 percent to 79.1 euros after the French engineering group posted a sharp rise in first-half profit, with energy activities providing the brightest spots in Asia, Europe and the United States.

First-half net profit shot up to 227 million euros (292 million dollars), a leap of 67 percent from the figure for the same period last year.

Back in London, insurance firm Resolution soared 3.94 percent to 660 pence after confirming weekend press reports that it was in early stage talks on a possible takeover.

The Sunday Times had reported that the life insurer was looking to merge with a larger rival and was understood to have met several life insurers in the past two months, including Standard Life and Prudential.

ITV was also in demand, up 3.15 percent at 114.5 pence, after newspapers reported that New York-listed cable company NTL was pressing ahead with a bid for the broadcaster.

Before the weekend, Wall Street shares closed a shade higher on Friday amid the US Veterans Day holiday, as aerospace giant Boeing announced it had won a lucrative 15-billion-dollar helicopter contract with the Air Force.

The leading Dow Jones blue-chip index posted a late afternoon gain after languishing in negative territory for much of the day with government offices and many banks closed for the public holiday.

The Dow Jones Industrial Average closed up a slight 0.04 percent at 12,108.43.

The technology-heavy Nasdaq composite finished up 0.58 percent at 2,389.72, while the broad-market Standard and Poor's 500 index climbed 0.19 percent to 1,380.90 points.

In Asia on Monday, Tokyo's benchmark Nikkei-225 index fell 0.56 percent to 16,022.49 points as investors remained nervous about the local economic outlook, dealers said.

Hong Kong's key Hang Seng Index closed down 0.12 percent at 18,868.54.