European shares head for longest winning streak in three years, M&A in focus

LONDON: European stocks edged higher in early trading yesterday, set to seal their longest winning streak in over three years as fresh deal-making stole the spotlight from the tail-end of a busy earnings season.

The pan-European STOXX 600 index was up 0.1 per cent by 0724 GMT, set for its seventh straight week of gains - its longest winning streak since March 2015.

Germany’s DAX and Britain’s FTSE 100 were both flat in per centage terms.

Though moves at the index level were muted, M&A news livened up early trading.

Shares in Sika soared nearly 11 per cent to the top of the STOXX after the Swiss chemicals company reached an agreement with French building materials firm Saint-Gobain to end a long-standing legal dispute.

Saint-Gobain, whose shares rose 2.2 per cent, is to take a large stake in Sika, but not majority control.

Shares in Daily Mail and General Trust (DMGT) were also big movers, up nearly 9 per cent, after US-based private equity firm Silver Lake Management Company agreed to acquire ZPG , the owner of British property websites Zoopla and PrimeLocation, for 2.2 billion pounds (US$3 billion).

DMGT is the biggest shareholder in ZPG, whose shares rocketed around 30 per cent to a record high.

Shares in fellow British classifieds websites Rightmove and Auto Trader both gained around 4.5 per cent.

While the first quarter earnings was winding down in Europe, basic resources was the best-performing sector after shares in ArcelorMittal rose 3.6 per cent.

The world’s biggest steelmaker beat earnings forecasts and gave an upbeat outlook for 2018.

So far blended year-on-year earnings growth for the first quarter has come in at 16 per cent for MSCI EMU, in dollar terms, compared with 26 per cent for the S&P 500, according to Thomson Reuters. — Reuters