By Tommy Stubbington
Pharmaceutical shares led European markets higher Tuesday amid a
flurry of deal activity and speculation, adding to buoyant
postholiday sentiment.
Shares in drug maker AstraZeneca leapt as much as 8% on reports
it had been approached by Pfizer about a potential takeover, while
GlaxoSmithKline and Novartis also rose after announcing a series of
transactions that will reshape both companies.
Further lifting confidence in the sector was an offer by
activist investor William Ackman and Valeant Pharmaceuticals to
acquire Allergan.
The Stoxx Europe 600 health care subindex was 2.9% higher.
Overall, the Stoxx Europe 600 index was 0.9% higher midmorning.
The strong start to the week in Europe followed two sessions of
gains for Wall Street on Friday and Monday, led by a continued
rebound in technology stocks.
U.S. stock futures were little-changed Tuesday. Moves in futures
don't necessarily predict market moves after the opening bell.
"There is been a generally better vibe recently about big deals.
Consolidation in the corporate sector usually generates value for
shareholders. It fits with the idea that we are midway through the
recovery," said Guy Foster, head of portfolio strategy at Brewin
Dolphin, which manages GBP26 billion ($43.7 billion) in assets.
Asian stocks were mixed, with Japan's Nikkei giving up early
gains to close 0.9% lower.
Global stocks have rebounded from last week's lows as investors
grow less concerned about tensions in Ukraine, and taken modest
encouragement from the start of the U.S. first-quarter earnings
season.
Even so, concerns continue to linger as cracks appear in the
agreement struck last week in Geneva between Russia and the West,
with both sides accusing the other of having violated the deal.
"Geopolitical issues in Ukraine continue to cast a shadow on
sentiment," said analysts at Crédit Agricole.
Foreign-exchange markets were largely quiet Tuesday, with the
yen recovering part of its overnight losses against the dollar.
In commodities markets, gold was up 0.1% at $1,291.60 an ounce,
and Brent crude oil was down 0.3% $109.61 a barrel.
The Pfizer approach for AstraZeneca was reported over the
weekend by the U.K.'s Sunday Times, which said informal
conversations about a possible tie-up had taken place between the
companies in recent weeks, and that AstraZeneca had knocked back
approaches that could value the company at $101 billion.
Pfizer and AstraZeneca declined to comment on the reports.
Elsewhere, shares in Philips NV sank after the consumer
electronics heavyweight reported a 14% drop in first-quarter net
profit.
Write to Tommy Stubbington at tommy.stubbington@wsj.com