European stocks jump on NYSE takeover of Euronext
European stocks rose on Friday, recovering part of recent losses as investors seized on news that the New York Stock Exchange Group was to acquire the pan-European stock market Euronext.
The $10-billion (€7,8-billion) cash and stock deal, announced overnight in New York, will create the first trans-Atlantic securities market—to be named NYSE Euronext—and placed pressure on rival exchanges to consolidate, dealers said.
In Friday’s early European trading in Paris the CAC 40 index surged 1,25% to 5 009,09 points.
Frankfurt’s DAX 30 rose 1% to 5 764,41 points and London’s FTSE 100 index of leading shares added 0,68% to 5 788,80 points.
The DJ Euro Stoxx 50 index of leading eurozone shares won 0,94% to 3 682,64 points.
In Paris trading, NYSE Group’s decision to acquire Euronext sent the share price of its European rival rocketing by as much as 3,7% to €70,75.
It later stood at €70,4, an increase of 2,18% from Thursday’s close.
“NYSE Group reached a definitive agreement to merge with Euronext, lifting the shares of the pan-European bourse operator,” analysts at the Sucden brokerage said.
“The merge puts more pressure on its rival European exchanges to look more seriously for partners.”
The 214-year-old NYSE trumped a competing bid by Deutsche Boerse, the German operator of the Frankfurt stock exchange, to acquire Paris-based Euronext, which operates bourses in Paris, Amsterdam, Brussels and Lisbon.
In Frankfurt trading, Deutsche Boerse shares rose 0,17% to €106,70.
The NYSE’s move also ups the ante for rival exchanges—chiefly the Nasdaq and Deutsche Boerse—to assemble their own deals to avoid being left behind in global consolidation.
Nasdaq has built up a 25,1% stake in the London Stock Exchange in recent months.
However, in London trading on Friday, the LSE dipped 0,62% to 1 115 pence.
Meanwhile, the Royal Bank of Scotland (RBS) saw its share price make solid gains on Friday, a day after surging almost 5% following the flotation of the Bank of China.
The flotation resulted in a near-trebling of RBS’s £900-million stake in BOC, the second-biggest Chinese bank.
RBS shares rose 1,59% to 1 793 pence.
On Wall Street, US shares had staged a strong rally on Thursday when investor sentiment got a boost from the latest economic news appearing to show solid economic growth with inflation mostly in check.
The Dow Jones Industrial Average climbed 0,82% to 11 260,28 points and the tech-heavy Nasdaq composite leapt 1,88% to 2 219,86.
The broad-market Standard and Poor’s 500 index advanced 1,23% to 1 285,71 points.
Analysts said there seemed to be improvement in sentiment, which was battered by the 3,1% slide for the broad market and a 6,2% loss for the Nasdaq in May amid heightened fears on inflation and slowing growth.
In Asia on Friday, Japanese share prices ended a rollercoaster week on an upbeat note after a late flurry of buying lifted the benchmark Nikkei index ahead of key US jobs data, dealers said.
Tokyo’s benchmark Nikkei-225 index finished the week 1,84% higher at 15 789,31 points.
Hong Kong’s key Hang Seng Index closed up 1,71% at 15 912,71 points on strong gains in China Mobile and other Chinese telecom stocks as investors hunted for bargains after recent sharp falls, dealers said. - AFP.