Business World

Saturday 19 August 2017

European shares retreat from 11-month highs

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

European shares retreated from an 11-month high early yesterday, with Switzerland's Actelion slumping after US healthcare company Johnson & Johnson ended discussions over a potential deal with Europe's largest biotech firm.

Actelion shares fell nearly 8pc in early trading after J&J said it was not able to reach an agreement that it believed would create adequate value for its shareholders.

J&J said in November it was in preliminary talks about a takeover of Actelion, then valued at about $20bn.

The Wall Street Journal, citing people familiar with the matter, reported that Sanofi had filled the gap left by J&J and was now in talks with Actelion. Sanofi shares were down 1.7pc.

Colruyt also put pressure on the broader market as its shares fell 8pc after the Belgian supermarket group announced results late on Tuesday.

The pan-European STOXX 600 was down 0.2pc, with healthcare and consumer staples sectors the biggest drags on the benchmark index. Investors awaited a policy meeting of the US Federal Reserve for hints about the market's near-term direction.

A quarter-point move is priced in, as are two more hikes next year. Any hint that the Fed may move more aggressively could affect various markets.

"Although there should be no surprises given the very much anticipated 25 basis points hike at today's meeting, the Federal Open Market Committee's accompanying statement and the Fed's dot plot will set the primary tone for the 2017 outlook for the US monetary policy," said Ipek Ozkardeskaya, an analyst at London Capital Group.

Italian banks remained choppy. After moving in and out of negative territory, the index was trading flat early yesterday, giving up some of the strong gains seen in the previous session.

In Ireland, the ISEQ Overall Index was moving largely in tandem with other European bourses.

But mid-afternoon, the index was down 0.2pc at 6,400.91.

Movers included Green REIT, which was down 1.4pc at €1.32 after rising on Tuesday after sealing a deal to buy out Starwood from a property project in Dublin.

Bulmers maker C&C made big gains, rising 3.8pc to €3.83. It signed a distribution and manufacturing deal this week with AmBev.

The UK's FTSE-100 was 0.1pc lower by mid-afternoon. Germany's DAX was also down just over 0.1pc, and France's CAC-40 had declined 0.5pc.

German retailer Metro jumped 5.2pc, the biggest gainer in STOXX 600 index, after reporting better than expected fourth-quarter operating profits. (Reuters)

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