European stocks choppy as Brent price falls; Arcam up 53% after GE bid
European stocks reversed earlier gains to trade lower as oil prices fell and lack of drivers gave investors little to be bullish about.
The pan-European STOXX 600 was flat-to-lower after initially starting the day in positive territory.
Brent crude prices dipped on Tuesday following Monday’s rally as other oil producers welcomed an agreement between Saudi Arabia and Russia to stabilize the oil market.
Oil prices rallied after the major producers confirmed they had agreed to cooperate to steady the oil market and limit output, although experts largely dismissed the statement from the two major oil producers as “lip service.”
Oil prices rallied by up to 5 percent ahead of Saudi Arabia and Russia signing a joint statement but Brent and WTI crude futures pared gains after the statement, which failed to promise the much-touted-but-never-delivered freeze to crude production. In early London trade, Brent crude had fallen slightly.
Elsewhere in the oil market, Statoil announced that it had increased its share in the Wisting discovery, an oil field in Norway. Shares were trading lower. The oil and gas sector was broadly higher.
In Asia on Tuesday, shares traded mixed and in a tight range as investors looked ahead to the Reserve Bank of Australia’s rate-setting meeting.
Bayer sweetens Monsanto offer
In European corporate news, German drugmaker Bayer is hoping that a sweetened takeover offer will win over U.S. seed producer Monsanto, putting more than $65 billion on the table in a bid to buy the agro-chemical firm. Bayer said it was in advanced talks with its rival and would be prepared to offer $127.50 per Monsanto share from its previous offer price of $125 per share only in connection with a negotiated deal, Reuters reported. Bayer shares were mildly lower.
British retailer Sports Direct has asked its legal adviser to carry out a further review of its working practices, including examining its corporate governance, after facing a slew of criticism this year over the amount it pays workers, sending shares higher.
Easyjet shares were higher after it reported that the number of passengers using its service in August was 7.5 million versus 7.1 million a year ago.
Deutsche Telekom denied a report by German newspaper Handelsblatt that it is considering restructuring which could include thousands of job cuts, calling the story “nonsense”. Shares were roughly flat.
Aegon shares fell after it announced that its chief financial officer, Darryl Button, is stepping down and returning to the U.S. after 17 years with the Dutch financial services company. Aegon said the selection process for his successor has begun.
Ingenico shares tanked over 12 percent after the French company cut its 2016 targets.
M&A activity boosts stocks
General Electric’s (GE) Swedish arm made a $695 million bid for 3D printing firm Arcam on Tuesday, while GE’s German unit made a separate bid for SLM Solutions. Arcam shares rallied 52 percent.
Meanwhile, German healthcare group Fresenius jumped to the top of the STOXX 600 after it announced plans to buy Spanish hospital chain Quironsalud for 5.76 billion euros ($6.42 billion).
Banks eyed
The banking sector is once again in focus for investors. In Italy, JPMorgan and other banks are trying to convince Qatar and Kuwait’s sovereign wealth funds to buy a large part of Banca Monte dei Paschi di Siena’s (BMPS) cash call, sending shares higher.
Meanwhile, Sky News reported that Santander’s U.K. arm is looking to buy credit card giant MBNA. Separately, Barclays raised its price target for Santander and BBVA. Shares of both banks were slightly higher.
Elsewhere, U.S. President Barack Obama has canceled a meeting with the President of Philippines’ at the ASEAN summit in Laos after the leader threatened to swear at the president, saying he is no American puppet.
Source: CNBC
