Energy takeover lifts London stock market

London's stock market rose on Wednesday as the heavyweight energy sector won a lift from news that Royal Dutch Shell has agreed to a huge takeover of BG Group.

Eurozone indices were steady as traders awaited an update on the outlook for US interest rates and looked ahead to the latest action by Greece over its massive debt pile.

London's benchmark FTSE 100 index was up 0.12 percent to 6,970.05 points in mid-afternoon trade.

The CAC 40 in Paris slipped 0.09 percent to 5,146.73 points and Frankfurt's DAX 30 index was off 0.43 percent to 12,071.01 points compared with Tuesday's close.

US stocks opened higher Wednesday following news of the Shell-BG merger worth the equivalent of $70 billion or 64 billion euros as the market awaited the kickoff of earnings season.

Five minutes into trade, the Dow Jones Industrial Average was at 17,924.79, up 0.28 percent, while the tech-rich Nasdaq Composite Index gained 0.33 percent to 4,926.56.

"The Shell and BG mega-merger adds 50 points to the FTSE, pulling it into positive territory regardless of the negative sentiment surrounding the European equity markets," said Alastair McCaig, market analyst at IG trading group.

"Today's proposed acquisition would create the largest company in the FTSE and the second largest oil and gas company in the world behind Exxon."

Shares in BG Group soared 31.76 percent to 1,199.50 pence, while Royal Dutch Shell 'B' shares were down 7.09 percent to 2,052.00 pence, with some analysts saying the offer price may turn out to be too large.

Within the sector, Tullow Oil jumped more than nine percent, BP gained 1.88 percent, while French energy giant Total was down a whisper, 0.01 percent, to 47.59 euros in Paris.

"The deal between Royal Dutch Shell and BG Group will prompt sector consolidation," noted Marc Kimsey, senior trader at Accendo Markets.

"The decline in oil prices over the past year has battered some stocks which are clearly now looking attractive. In the last year BG shares fell 30 percent... By comparison sector behemoths BP and Royal Dutch Shell have only shed 10 percent over the same period leaving them in the position of predator rather than prey."

Later Wednesday, the Federal Reserve publishes minutes from its last interest rate meeting, with dealers set to pore over them for clues as to when the US central bank plans to announce a hike in borrowing costs.

Markets were also hesitant ahead of Greece faces a Thursday deadline for its next bailout repayment to the International Monetary Fund.

Eurozone deputy finance ministers were meeting on Wednesday and Thursday to seek agreement on Athens' reforms needed to unlock the last tranche of its multibillion-dollar bailout and avert a default.

In foreign exchange, the European single currency climbed to $1.0864 from $1.0811 late in New York on Tuesday.

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