Business World

Wednesday 16 January 2019

Markets update: M&A activity brightens lacklustre European stock markets

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

Helen Reid

A European recovery rally dissipated on Thursday with benchmarks across the region weighed down by commodities and technology stocks, while acquisition approaches sent Danish telecoms group TDC and Swiss insurer Swiss Re flying.

Europe's STOXX 600 share index fell 0.2pc by 08:30 GMT, pulled lower by a 1.1pc fall in basic resources , and weaker industrials stocks. The index was still down 2.5pc year-to-date after equities worldwide took a battering this week.

Financials limited the damage, with euro zone banks gaining 0.5pc after strong earnings from UniCredit and Societe Generale.

Merger and acquisition activity drove the top European gainers.

Danish telecoms company TDC led the STOXX 600, shooting up 16pc and on track for its best day since June 2007, after a takeover approach from Macquarie and three Danish pension funds, which it rejected.

Swiss Re shares jumped 6pc after the reinsurer said it was in talks with Japan's SoftBank to sell a minority stake.

Strong results also boosted some stocks as investors' focus turned back to the European earnings season.

Societe Generale shares jumped 5.5pc after the bank reported forecast-beating results despite a quarterly drop in profits.

Compass Group, the world's biggest catering firm, jumped 6.2pc after it raised its expectations for revenue growth.

Chipmaker AMS gained 4pc, with traders citing an upgrade to 'overweight' by JP Morgan.

Schibsted sank 5.6pc after traders said its third-quarter earnings missed forecasts.


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