German shares lead Europe higher on M&A cheer

(Correct paragraph 1 to say Siemens Energy is not a unit of Siemens AG. Corrects paragraph 4 to say Siemens AG is the largest shareholder in Siemens Energy)

May 23 (Reuters) - Broad-based gains helped European shares rally more than 1% in early trade on Monday, with the German market lifted by deal talks between Siemens Energy and its unit.

The pan-European STOXX 600 index .STOXX was up 1.2% by 0720 GMT, after posting its fifth weekly loss in six weeks as investors fled riskier assets on fears of recession.

Banks .SX7P rose 0.5%, while basic material .SXPP and industrial stocks were also among the biggest boosts to the STOXX 600.

Siemens Energy ENR1n.DE gained 3.6% after launching a 4.05 billion euro ($4.28 billion) bid for minority holdings in struggling wind turbine unit Siemens Gamesa SGREN.MC . Siemens Gamesa jumped 5.8%. Siemens AG SIEGn.DE which is the largest shareholder in Siemens Energy, rose 2.3%.

In global markets, while China stocks fell on COVID-19 worries as cases rose in Beijing, the gradual easing of curbs in Shanghai as well as hopes of more central bank stimulus kept up hopes of a recovery in the world's second-largest economy. Most stocks outside China and U.S. futures gained.

Reporting by Susan Mathew in Bengaluru; Editing by Aditya Soni

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