European stocks started the second quarter on a positive note, benefiting from gains posted by industrial and mining stocks following increased merger-and-acquisition deals in the sectors.
The FTSEurofirst 300 was led by Alstom, which posted a 4.5% increase on Tuesday in early trading. The French company makes turbines and trains and said it was selling its heat exchange arm to Triton, a private equity group based in Germany.
Investors received well news that BHP Billiton, a global mining company, was considering restructuring options to simplify its assets, including splitting-off its non-core operations. The company’s shares advanced 2.1% following the reports.
A report that UK’s Weir Group desired to acquire an engineering firm Metso of Finland boosted the latter’s shares, which grew 12% to lead the STOXX Europe 600.
Weir Group’s stocks slid 2%, the worst plunge on the FTSEurofirst 300.
“There’s a lot of confidence within companies, and there’s a lot of cash, and that can only point to one thing, which is increased M&A activity in the coming months,” Mike McCudden of Interactive Investor said.
McCudden added that positive remarks by Yellen and impressive economic reports from China were going to drive more gains.
As CNBC reports, shares of FirstGroup declined by about 5% after the transport operator had its ratings revised downwards on Tuesday from “buy” to “neutral” by Bank of America Merrill Lynch.
The European’s FTSEurofirst 300 stood at 1,338.23, having advanced 0.4% points.
The gains in Europe also benefited from expectations that economies were going to receive stimulus support by US and Chinese authorities.
According to Reuters, stocks usually show a solid performance at the beginning of a new month, as investors reorganize portfolios and positions in anticipation of the month ahead. However, the gains witnessed on Tuesday are an indicator of recovery of stocks from a recent run of losses.
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