European stock markets close lower
European stock markets closed lower yesterday while the euro rose against the dollar as investors digested a burst of merger and acquisition activity and comments by US Federal Reserve head Ben Bernanke.
Dealers said the major feature was news of the London Stock Exchange’s tie-up with its Toronto counterpart which was trumped after the close by a possible Deutsche Boerse merger with the NYSE Euronext.
London’s FTSE 100 index of top shares finished the day down 0.64 per cent to 6,052.29 points, Frankfurt’s DAX 30 slipped 0.03 per cent to 7,320.90 points and the Paris CAC 40 dipped 0.43 per cent to 4,090.74 points.
In foreign exchange deals, the euro firmed to $1.3696 , briefly topping $1.37 , compared with $1.3621 late in New York on Tuesday.On London’s second-tier FTSE 250 index, the London Stock Exchange saw its share price rocket at first before settling down to a three per cent rise after it announced a landmark merger deal with its Canadian counterpart.
“The merger will create a world-leading organisation and is unanimously being recommended by the boards of both LSE and TMX,” the pair said in a joint statement.
The company, which will span 20 trading markets and platforms across Europe and North America, will be well-placed to tap into the booming commodities sector at a time of rocketing prices for commodities like copper and crude oil.
The transaction was billed as a merger of equals but LSE investors will hold the upper hand with 55 per cent of the new group while TMX shareholders will have 45 per cent. Both exchanges retain their existing brand names.
Meanwhile, trading in shares of Deutsche Boerse, which runs the Frankfurt stock exchange, was suspended yesterday, as news emerged of tie-up talks with NYSE Euronext, which was also suspended in Paris and New York.
Deutsche Boerse and NYSE Euronext said they are in “advanced discussions” on merging in order to create the world’s largest stock exchange operator by revenues and profits.
The British stock market was also pulled lower as a number of top companies went ex-dividend – meaning that their shares no longer carry the right to their most recently declared dividend.