European shares rise on upbeat German business morale, M&A cheer

European shares rose on Monday as an unexpected rise in German business morale underscored the resilience of the region's largest economy, while wind turbine maker Siemens Gamesa jumped on a $4.28-billion takeover offer from its biggest investor. After rising as much as 1.3% in early trade, the pan-European STOXX 600 index pared some gains to trade up 0.3% by 0908 GMT.

Commodity-linked stocks gained more than 1% on the back of higher oil and base metal prices, while banks rose 0.2%. Siemens Gamesa jumped nearly 7% to top the STOXX 600 index after Siemens Energy launched a 4.05 billion euro ($4.28 billion) bid for minority holdings in struggling wind turbine units.

Siemens Energy's largest shareholder - Siemens AG - rose 0.4%. "The very fact there's still deal-making going on is helping lift sentiment ... because it shows that there is still an appetite for the opportunity," said Susannah Streeter, senior investment and markets analyst at Hargreaves Landsdown.

Markets have had a volatile few weeks, with the STOXX 600 posting another weekly loss on Friday as investors grappled with COVID-19 updates from China and signs of global recession from companies and economic indicators. Providing some optimism on Monday was a survey from the Ifo institute showing that German business morale unexpectedly rose in May, indicating that Europe's largest economy was proving resilient in the face of high inflation, supply chain problems, and the war in Ukraine.

"We believe markets will remain turbulent until investors get greater clarity on the 3R's — recession, rates, and risk," said Mark Haefele, chief investment officer at UBS Global Wealth Management. In China - Europe's major trading partner - COVID-19 cases rose in Beijing but the gradual easing of curbs in Shanghai, as well as hopes of more central bank stimulus, kept up bets of a recovery in the world's second-largest economy.

U.S. President Joe Biden said on Monday he was weighing cutting tariffs on Chinese goods that were imposed during the tariff war with Beijing under Donald Trump's administration. Among individual shares, Deutsche Euroshop soared 40.9% after a consortium of bidders offered 1.4 billion euros ($1.48 billion) to acquire the German shopping center investor.

British home improvement retailer Kingfisher firmed 1.9% after reporting first-quarter sales significantly ahead of its pre-pandemic performance and maintaining its full-year guidance.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)