Swedish telecoms equipment maker Ericsson on Thursday denied a market rumor, which boosted its share 2.5 percent in a falling market, that Microsoft Corp would make a bid for it. "On such rumors, please see the statement from last week from our Chairman Michael Treschow that we are not in any takeover talks or similar alliances, and that we are now focusing on the rights issue which is to be carried out in the third quarter," Ericsson spokesman Mads Madsen told Reuters. At 0923 GMT Ericsson traded 2.5 percent higher at 16.2 crowns when the DJ Stoxx technology index was down 0.8 percent and the Nordic stock index was 1.5 percent lower, making Ericsson one of the top gainers in Europe.

"It's trading higher on a rumor that Microsoft would make a bid for Ericsson," a Swedish broker said. Loss-making Ericsson, the world's biggest producer of mobile networks, has been buoyed by a plethora of rumors last week about its role in the expected consolidation of the sector after the share price hit seven year-lows around 13 crowns at the end of June.