European stocks advanced, posting their first monthly gain since May, as drugmakers climbed, outweighing a slump in Tesco PLC shares.
AstraZeneca PLC climbed 2 percent, leading a gain by healthcare companies, after a report that Pfizer Inc may have resumed takeover talks. Tesco dropped 6.6 percent after lowering its full-year profit forecast and its interim dividend.
The STOXX 600 gained 0.3 percent to 342 on Friday in London, erasing a decline of as much as 0.4 percent in the final half an hour of trading. The benchmark dropped 0.7 percent on Thursday as evidence mounted that Russian troops have made an incursion into eastern Ukraine.
“Tesco’s surprise announcement has been taken as a sign that competition in the sector is about to intensify, at shareholders’ expense,” said Guy Foster, the London-based head of research at Brewin Dolphin Securities Ltd. “The healthcare sector is being led by AstraZeneca bid rumors.”
The STOXX 600 climbed 1.6 percent this week and 1.8 percent this month, as European Central Bank President Mario Draghi signaled policymakers were ready to start a bond-buying program. It dropped last month and in June.
Twelve out of 18 national benchmark indices in Western Europe rose on Friday. Germany’s DAX added 0.1 percent, while France’s CAC 40 gained 0.3 percent. The UK’s FTSE 100 increased 0.2 percent.
AstraZeneca gained 2 percent to ￡45.67. Swedish newspaper Dagens Industri said Pfizer may have restarted bid talks with the London-listed drugmaker, without revealing where it got the information. The US company abandoned a US$117 billion bid to buy AstraZeneca in May. UK takeover rules prevented it from resuming talks until Aug. 26.
Tesco slid 6.6 percent to ￡2.30, its lowest price since 2003, after the UK’s biggest retailer lowered its full-year profit forecast to a range of ￡2.4 billion to ￡2.5 billion (US$3.98 billion to US$4.15 billion), and cut its interim dividend by 75 percent to ￡0.0116 per share. It expects first-half trading profit to reach ￡1.1 billion. Dave Lewis will take over as chief executive officer from tomorrow, instead of Oct. 1 as previously announced.
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