European stocks climbed for a third straight week amid takeover activity and corporate earnings that surpassed analysts’ estimates.
AstraZeneca PLC surged 18 percent as Pfizer Inc sweetened its bid for the UK’s second-biggest drugmaker. Alstom SA jumped 10 percent as General Electric Co made an offer for the French company’s energy business. Royal Bank of Scotland Group PLC climbed 9.4 percent after posting quarterly profits that exceeded projections.
The STOXX Europe 600 Index added 1.3 percent to 337.76 in a shortened holiday week for its biggest increase in a month. The benchmark equity gauge rallied 1.1 percent last month, following a decline in March.
The index closed within 0.4 percent of the six-year high it reached on April 4.
“M&A [merger and acquisition] is helping the market,” Louis de Fels, a Paris-based fund manager at Raymond James Financial Inc, said in an interview. “US companies have a lot of cash, and they want to use it in Europe, so it is positive for the European market.”
National benchmark indices rose in 16 of the 18 Western European markets this week. The UK’s FTSE 100 advanced 2.1 percent, while Germany’s DAX added 1.6 percent. France’s CAC 40 gained 0.3 percent. Most European markets were closed on Thursday for a holiday.
M&A announcements, coupled with better-than-expected earnings, offset concern over the Ukraine crisis. The US and the EU imposed new asset freezes and travel bans on people close to Russian President Vladimir Putin and some of their companies. Ukraine sent armored vehicles and artillery to retake Slovyansk, a stronghold for pro-separatist forces, defying Putin’s demand to pull back troops.
AstraZeneca surged 18 percent as Pfizer sweetened its bid to ￡63.1 billion (US$106 billion). AstraZeneca rejected the proposal on Friday, saying the offer fails to recognize the value of promising experimental medicines under development.