European Stocks Bounce as Deals Bolster Industrial Shares

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Forex Trading Market Fundamental Analysis - April 28, 2014

European Stocks BounceB as Deals Bolster Industrial Shares

European stocks went back to their winning ways on Thursday as mergers and acquisitions and a steady report from Schneider Electric of France stimulated industrial stocks.

Alstom stocks rose 10.8% to lead the FTSEurofirst 300 after Bloomberg said that General Electric was in negotiations to acquire the maker of trains and turbines for about $13 billion. The French company said it was not aware of any possible public tender offer.

Scania saw the second-highest jump, going up 10%, after its fourth-largest owner said it was okay with Volkswagen’s intentions to buy the truck maker, as Reuters reports.

Merger and acquisitions have intensified in Europe and helped bolster European stocks in recent days as drug makers GlaxoSmithKline and Novartis revealed a swap of assets and speculation came up about Pfizer wanting to take over AstraZeneca.

“The markets at the moment are constantly looking for reassurance, with all that is going on in Ukraine, and M&A activity shows in the corporate world at least it’s business as usual,” said trader Farhan Ahmad of Tradenext.

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As Bloomberg reports, Telkom Austria added 6.3% after America Movil SAB announced it plans to take over the firm’s minority holdings.

The FTSEurofirst 300 index of Europe climbed 0.6% at 1,346.81 points as of 0757 GMT, recovering most of its decline for the day before and picking up an advance it started last week. The Euro Stoxx 50 index of euro zone rose 0.8% at 3,199.81 points.

The Stoxx 600 Europe advanced 1%, also buoyed by Schneider Electric’s 4.8% gain. The maker of electric gears posted a gain in sales for the first quarter and said that Western Europe business had grown.

Shares of technology firms rebounded after Apple of US approved an additional $30 billion share buyback and Facebook, a social networking giant, said that its mobile advertising revenue soared in the first quarter, helping it surpass projections. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com