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Vaccine hopes, global M&A boost European stocks

Battered travel and leisure stocks led the gains in Europe, with British Airways-owner IAG jumping 7%, and easyJet and Lufthansa rising more than 2% each. Meanwhile, futures pointed to a strong open for Wall Street after U.S. chipmaker Nvidia Corp said it would buy UK-based chip designer Arm from Japan's SoftBank Group for as much as $40 billion in a deal set to reshape the global semiconductor landscape.

Reuters | Washington DC | Updated: 14-09-2020 14:37 IST | Created: 14-09-2020 14:23 IST
Vaccine hopes, global M&A boost European stocks
Representative image Image Credit: ANI

European stocks kicked off the week on a positive note as hopes of a coronavirus vaccine and a flurry of global M&A activity overshadowed worries about a disorderly Brexit.

The pan-European STOXX 600 rose 0.4% on Monday, although the index had erased some of its opening gains. The German DAX also added 0.4%, while France's CAC 40 climbed 0.6%. News over the weekend that AstraZeneca had resumed clinical trials of its COVID-19 vaccine after being suspended last week sparked a wave of buying across global stocks.

However, the British drugmaker's shares were flat amid losses for the healthcare sector following moves by U.S. President Donald Trump to reduce U.S. drug prices over the weekend. Battered travel and leisure stocks led the gains in Europe, with British Airways-owner IAG jumping 7%, and easyJet and Lufthansa rising more than 2% each.

Meanwhile, futures pointed to a strong open for Wall Street after U.S. chipmaker Nvidia Corp said it would buy UK-based chip designer Arm from Japan's SoftBank Group for as much as $40 billion in a deal set to reshape the global semiconductor landscape. Europe's tech sector rose 0.8%, with chipmakers STMicroelectronics, AMS and ASM International up between 1% and 2%.

"The Nasdaq futures are sharply higher, and that is probably helping," said Craig Erlam, senior market analyst at Oanda. "A half-percent move is not exactly a knock-out start for Europe, which is indicative of a more nervous environment." London's exporter-heavy FTSE 100 was up just 0.3% as the pound gained some ground after last week's losing run.

Adding to fears of a messy departure for Britain from the European Union, car industries from both sides warned that failure to secure a free trade agreement would cost the sector 110 billion euros ($130 billion) in lost trade over the next five years. France's Dassault Aviation jumped 11.1% to the top of STOXX 600 as Greece is set to boost its armed forces through the purchase of 18 Dassault-made Rafale fighter jets and four frigates.

Frankfurt-listed shares of Immunomedics surged 102% on news Gilead Sciences will acquire the U.S. biopharmaceutical company for $21 billion. Metro rose 6.6% after EP Global Commerce, an acquisition vehicle owned by Czech and Slovak investors, launched a takeover offer for the German wholesaler's shares.

Swedish fashion giant H&M and Zara-owner Inditex fell 2.8% and 0.3%, respectively, after Morgan Stanley downgraded to "underweight", saying the two are the most disrupted by the pandemic among the retailers it covers.


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