Europe shares start 2010 on a high on banks, commods
Jan 4, 2010 Make Money Online
European shares rose on the first session of the year on Monday, extending last year’s strong run, with banks, oil producers and drugmakers leading the gainers.
By 0807 GMT, the FTSEurofirst 300 .FTEU3 index of leading European shares was up 0.7 percent at 1,052.91 points, after surging 25.7 percent in 2009 — its best yearly gains in a decade after a dismal 2008.
Novartis (NOVN.VX) fell 0.3 percent after the drugmaker said it plans to get full control of eye care group Alcon (ACL.N) for a total of $39.3 billion, to diversify away from prescription drugs, after agreeing to acquire a majority stake from Nestle (NESN.VX). [ID:nLDE6030BH]
Other drugmakers were firmer. GlaxoSmithKline (GSK.L), AstraZeneca (AZN.L), Roche (ROG.VX) and Sanofi-Aventis (SASY.PA) were up 0.3-1.3 percent.
The news also raised speculation Nestle, which gained 0.2 percent, might enter the fray for Britain’s Cadbury (CBRY.L) and bid against Kraft Foods (KFT.N). Cadbury put on 0.6 percent.
Philip Gijsels, senior equity strategist at Fortis Bank in Brussels, said major merger & acquisition deals would help lift the market.
“It is possible that we will see quite a bit of M&A this year because companies still have quite a bit of cash and those who are in strong position would try to take advantage of those who are in weakness,” Gijsels said. “What you will see is M&A between companies on a corporate level. You will not see the typical leverage buyouts driven by private equities which are difficult to get financing.”
Oil producers tracked firmer crude prices CLc1, which rose above $80 a barrel on news that Russia has halted oil supplies to Belarus and on cold weather in the United States.
BP (BP.L), Royal Dutch Shell (RDSa.AS) and Total (TOTF.PA) put on 0.6-1.1 percent.
Banks were also firmer, with HSBC (HSBA.L), BNP Paribas (BNPP.PA), Credit Suisse CGSN.VX up 0.8-1.2 percent. (Reporting by Dominic Lau)
–Reuters–
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Tags: Alcon, AstraZeneca, bank, Britain's Cadbury, drugmaker, European shares, Eye Care, GlaxoSmithKline, Nestle, Novartis, prescription drugs, Roche, Royal Dutch Shell, Sanofi-Aventis, Stock Market
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