By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets posted
broad-based gains on Thursday, with the trading mood lifted by
dovish comments from European Central Bank President Mario Draghi
and upbeat German business-confidence data.
The Stoxx Europe 600 index climbed 0.7% to 337.28, recovering
from a 0.6% loss on Wednesday. For the week, the benchmark was
looking at a 1.5% gain.
Helping boost the index, shares of Alstom SA rallied 14% after
reports that General Electric Co. (GE)is looking to buy the French
industrial company. Ishaq Siddiqi, market strategist at ETX
Capital, said in a note such a takeover would be the biggest in
GE's history and that it would make "complete strategic sense".
"GE is basically in every one of Alstom's businesses plus more,"
he said. "If GE manages to charm Alstom into its arms, the deal
would be worth 5% of the U.S. giant's market cap -- expect GE
shares to jump at the Wall Street open later." GE shares were up
0.5% in early U.S. premarket action.
A representative from Alstom said in a statement that the
company is unaware of any potential offer and that the group will
use its annual report on May 7 as an "opportunity to give an update
on the prospects of its activities." A spokesperson from GE
declined to comment on the report.
More broadly, European markets opened higher on the back of an
upbeat trading mood in U.S. premarket action, following
better-than-expected earnings reports from Apple Inc. (AAPL) and
Facebook Inc. (FB). Stock futures for the three U.S. benchmarks
were all up in premarket trade, with Nasdaq 100 index futures
(NDM4) rising 1.2%.
ECB chief Draghi also captured attention, speaking at a banking
conference in Amsterdam. He addressed the strong euro exchange rate
and said it's an "increasingly important factor" in monetary
policy, which could trigger additional easing action.
"A rise in the exchange rate, all else being equal, implies a
tightening of monetary conditions, a downward impact on inflation
and potentially a threat to the ongoing recovery. If so, this would
call for policy action to maintain the current accommodative
stance," Draghi said in his speech.
Discussing the low inflation level in the currency union, Draghi
said a worsening of the medium-term inflation outlook may call for
a broad-based asset-purchase program.
The European benchmark also held on to gains after the German
Ifo business-climate index rose to 111.2 points in April, up from
110.7 in March and beating expectations of a small decline.
Germany's DAX 30 index gained 0.8% to 9,615.34, while France's
CAC 40 index added 0.9% to 4,490.73. The U.K.'s FTSE 100 index
advanced 0.6% to 6,717.25.
Shares of AstraZeneca PLC (AZN) climbed 5.1% in London after the
drug maker confirmed its 2014 financial guidance. The company,
however, posted a fall in first-quarter profit as sales of its
best-selling drugs continued to be squeezed by generic
competition.
In Paris, shares of Carrefour SA gave up 1.3% after Exane BNP
Paribas cut the supermarket chain to underperform from neutral.
Outside the major indexes, shares of Novartis AG dropped 1.1%
after the pharma firm's first-quarter profit narrowly missed
analyst expectations.
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