LONDON, Aug 12 — Telecommunications stocks boosted European bourses today after a billion dollar takeover offer for Switzerland’s Sunrise Communications, while London’s FTSE 100 gained on bets of more stimulus after a collapse in UK’s quarterly economic output.
The pan-European STOXX 600 rose 0.3 per cent, gaining for a fourth straight session.
Sunrise Communications surged 26 per cent to hit a record high after Liberty Global launched a takeover offer for the Swiss telecoms group in a deal valued at 6.8 billion Swiss francs (RM31 billion).
Shares in German telecoms investor Freenet, Sunrise’s largest shareholder, jumped 15.4 per cent, while the broader sector gained 1.6 per cent.
“Consolidation between operators would be positive for the industry as it would reduce competitive pressure on prices and improve the return on capital,” Domenico Ghilotti, an analyst at Equita wrote in a note.
Meanwhile, London’s FTSE 100 rose 0.6 per cent as investors focused on signs of a recovery in economic output in June, shrugging off a record 20.4 per cent plunge in the second quarter, the largest contraction reported by any major economy.
June output grew by 8.7 per cent from May, just above economists’ average expectation in a Reuters poll for an 8 per cent rise.
“It’s been widely expected that UK will be in a recession. But the fact that May number was upgraded and the June number was better than expectations, is offering a little bit of encouragement,” said Russ Mould, investment director at AJ Bell.
“Markets are more interested in debating the pace of the recovery.”
Markets globally have rallied this week on the back of improving data from China and Europe, signs of progress in developing a Covid-19 vaccine and a fresh US stimulus.
However, Wall Street indexes fell overnight on growing uncertainty about a stalemate in Washington over the stimulus deal.
Among other individual movers, Danish enzyme maker Novozymes fell 5.8 per cent after it issued a weaker profit outlook than previously forecast.
European food-ordering firm Just Eat Takeaway.com NV rose 3.9 per cent after reporting higher revenue and underlying profit for the first half of 2020.
British online fashion retailer ASOS jumped 7.2 per cent as it forecast full-year sales and profit significantly ahead of market expectations. — Reuters