By Ishaq Siddiqi Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European stock markets are expected to open higher Monday, with optimism on the up as merger and acquisition activity aids sentiment and the Group of Twenty concluded that global stimulus efforts would remain in place. "There was, however, a lack of consensus [at the G-20 meetings] over management of the global financial industry, which at least in the short term is likely to be seen as good news for the banking sector, although whether a sufficiently robust worldwide regulatory structure could ever be applied remains a point of debate," said Ben Potter, research analyst at IG Markets. He called London's FTSE 100 index to open 33 points higher at 5176, Frankfurt's DAX index up 27 points at 5515, and the CAC-40 index in Paris 33 points higher at 3740. Meanwhile, reports that Kraft Foods Inc. (KFT) is likely Monday to launch a hostile bid for Cadbury PLC (CBRY.LN), valued at roughly GBP10 billion, is set to stimulate the market. The U.K.'s Takeover Panel has set a 1700 GMT deadline for the U.S. company to make a revised bid or walk away for six months. The combination of increased M&A and the conclusion of the G-20 meetings have prompted a marked increase in investor confidence, said Potter. "Despite the disappointing U.S. employment numbers on Friday, it's very encouraging to see the market follow through from Friday's strong close [on Wall Street]. This momentum buying has not been evident in recent weeks and may suggest another shift in investor psyche," added Potter. On Wall Street Friday, General Electric paced a move higher for stocks even though the U.S. payrolls report showed the unemployment rate broke above 10% last month, weighing on commodities prices and keeping any stock gains muted. Overall, the Dow Jones Industrial Average gained 0.2% to 10,023.42, marking its third consecutive session in the green. With the move, the index snapped a two-week losing streak, climbing 3.2% on the week. The Standard & Poor's 500 finished up 0.2% at 1069.30. For the week, the S&P 500 rose 3.2%, also halting a two-week losing streak. Gains in the DJIA were led by General Electric, up 6.2% to 15.33, as the industrial conglomerate received a boost from a couple of analyst upgrades of the company to outperform and reports of progress in GE's efforts to sell its NBC Universal unit to Comcast. Still, the stock and commodities markets remained under pressure as the U.S. Labor Department said unemployment rose by more than expected in October and employers cut more jobs than forecast. While a positive revision of September's nonfarm payrolls helped ease some of the market's concern, the report's overall tone revived many of the economic fears that have been prevalent among traders for months. Still, Friday's positive finish on Wall Street lent Asian share markets support early Monday. Bourses across the region were mostly higher, with AXA Asia Pacific surging in Australia, after spurning a multi-billion dollar takeover offer from rival wealth management firm AMP. Japan's Nikkei 225 traded up 0.2%, while Australia's S&P/ASX 200 closed up 1.8%. South Korea's Kospi Composite gained 0.2%, while Hong Kong's Hang Seng Index tacked on 1.3%. Still, some traders were cautious. "There's no clear picture yet [on whether we are seeing real economic recovery], so investors are reluctant to take new positions at this level," said OCBC head of research Carmen Lee in Singapore. And despite the U.S. jobs report, the trend of economic data pointed to improving economic conditions and earnings, helping buoy Australia's market, said RBS director, David Iron in Sydney. "The market's taken heart from a deep cyclical like Orica reporting well above expectations and an economic bellwether like CBA having a very robust outlook," he said. "Plus, the much touted next wave of mergers and acquisitions is coming to fruition, with bids for Transurban and AXA." AXA Asia Pacific Holdings jumped 33% after the company rejected an A$11.04 billion cash and equity takeover proposal from AMP, despite the deal having the backing of its French parent, AXA SA. Under the offer, AMP would buy all the shares in AXA APH, including the 53.9% held by AXA SA, while the French firm would buy AXA APH's Asian operations. But AXA rejected the offer as inadequate, saying the bid was made "against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability." In the foreign exchanges, the dollar traded lower against the euro and the pound, with traders saying the U.S. jobs data has reinforced the greenback's downside bias. "There's no way the Fed can hike its policy rates for now. In the end, it's a dollar-sell trend," said Nomura Securities senior dealer Hiroshi Maeba in Tokyo. At 0730 GMT, the euro was trading at $1.4952, up from $1.4847 in late New York business Friday. But against the yen, the dollar was at Y90.23, up from Y89.88. In the oil market, crude was higher, with Nymex December crude up $1.23 at $77.10 per barrel. Meanwhile, spot gold hit a new record on dollar weakness. At 0730 GMT it was at $1097.75 per troy ounce, up 80 cents from the New York close. Elsewhere, European bond markets opened lower, with the December bund futures contract last seen at 120.81, down 0.14. -By Ishaq Siddiqi, Dow Jones Newswires; +44-20-7842-9488; ishaq.siddiqi@dowjones.com

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