October 6, 2016 / 7:27 AM / in 2 years

Recovery in banks lifts European shares

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LONDON, Oct 6 (Reuters) - European shares opened higher on Thursday with the beaten down banking sector providing the biggest boost while reports of takeover sent Osram to a record high.

The STOXX 600 index rose 0.3 percent, rebounding from a fall in the previous session when worries that the European Central Bank might wind down the pace of bond-buying before the end of its asset purchase programme hit both shares and bonds.

European banking stocks extended their gains from the previous session, with Deutsche Bank rising 1.7 percent after German officials said that the government was pursuing discreet talks with U.S. authorities to help the lender secure a swift settlement over the sale of toxic mortgage bonds, according to sources in Berlin.

Unicredit shares rose 4 percent. Both Deutsche Bank and Unicredit have roughly halved in value this year.

Osram jumped 10 percent, hitting a record high on reports of a takeover offer from Chinese chipmaker Sanan Optoelectronics Co Ltd.

Meanwhile, budget airline easyJet was the biggest laggard, down over 6 percent after saying that its annual profit would fall by over 25 percent this year, its first drop since 2009, hit by disruption, security concerns and exchange rate headwinds. (Reporting by Kit Rees; Editing by Vikram Subhedar)

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