Monday, 30 March 2015 19:28
PARIS: European stocks rose on Monday, bouncing back from last week’s losses with tech shares rallying after merger talks in the industry spurred rallies in the sector.
Shares in European technology stocks such as Infineon , STMicroelectronics and ASML were all up 2-3 percent on Monday.
U.S. tech stocks had climbed on Friday after news of Intel’s talks to buy fellow chipmaker Altera in a deal likely to top $ 10 billion.
Signs of merger and acquisition (M&A) activity also pushed up the shares of Yoox by 9.4 percent, after Yoox and Richemont’s Net-a-Porter confirmed merger talks to create an industry leader in the fast-growing online fashion market.
Corporate deals, along with new economic stimulus measures from the European Central Bank which have helped to weaken the euro on currency markets, have driven European stock markets to new highs this year.
The pan-European FTSEurofirst 300 index rose 0.9 percent to 1,592.07 points, putting it back near a 7-1/2 year high of 1,613.80 points reached earlier in March.
Germany’s DAX also rose 1.4 percent to 12,034.12 points, near a record high of 12,219.05 points hit in mid-March.
“You don’t get rich by ‘shorting’ this market. There’s still plenty of M&A around,” said Toby Campbell-Gray, head of trading at Tavira Securities.
GREECE UNDERPERFORMS
Athens’s ATG index edged down 0.2 percent after Greece and its international creditors continued talks on reforms to unlock loans. The lenders said it could take several days before a proper list of measures was ready.
French cement group Lafarge also underperformed, falling 2 percent after two shareholders of its Swiss merger partner Holcim appeared unhappy with revised deal terms designed to placate them.
Shares in Italy’s World Duty Free sank 8.5 percent after Swiss group Dufry offered 10.25 euros a share to buy the travel retailer, below Friday’s closing price. Dufry rose 8.5 percent.
Nevertheless, investors said the broader, long-term trend remained one of European stocks continuing to push higher.
Martin Todd, co-manager of the Hermes Sourcecap European Alpha Fund, backed stocks such as Spanish airport operator Aena , Swiss bakery company Aryzta, German electronic payment company Wirecard and Telecom Italia .
Jean-Louis Cussac, head of Perceval Finance, added there were few reasons to sell out for now.
“On the upside, there are no big resistance levels in sight, so the best thing to do is just to follow the trend for now,” he said.
Copyright Reuters, 2015
