European shares edged higher to close near a recent one-month peak yesterday, with merger and acquisition speculation about British broadcaster ITV helping media stocks and Novartis leading drugmakers.
Novartis, up 4.3 per cent, was the top gainer on the FTSEurofirst 300 index on news a new medicine from the company could replace drugs that have been central to treating heart disease for a quarter of century. The Novartis advance helped the STOXX Europe 600 Healthcare index to gain the most of any sector, at 1.1 per cent.
ITV led the European media index higher, up 0.8 per cent.
The Telegraph reported that Liberty Global was canvassing support from major ITV shareholders after it acquired a 6.4 per cent stake, raising speculation of a full takeover bid. ITV declined to comment.
Broker Liberum said ITV was its top media pick and still had plenty of upside in its share price. Any bid for the company should reflect the potential upside from ITV’s being allowed to charge re-transmission revenues for ITV1, Liberum said.
The FTSEurofirst 300 index ended 0.2 per cent higher at 1,376.83 points, just below last week’s one-month high.
The Euro STOXX 50, which will add Nokia from September 22, replacing CRH after an index reshuffle, was up 0.1 per cent. CRH fell 0.7 per cent and Nokia dropped 1.4 per cent.
Investors traded cautiously amid lingering tension in Ukraine, weak economic data from China and lower volumes because of a public holiday in the US. Thursday’s meeting of the European Central Bank also loomed.
ECB sources told Reuters last week new action was unlikely but not impossible. They said the barrier to some kind of quantitative easing was still “very high”.
Tension in Ukraine continued to be felt in the market, with Raiffeisen falling 2.3 per cent on concerns about further sanctions against Russia.
Raiffeisen has 2.8 million customers in Russia, one of the country’s top 10 banks.
The tension also affected leading economic indicators, with a business survey showing that eurozone manufacturing growth slowed more than initially thought last month, as new orders dwindled and factories suffered.
Among other individual movers, Iliad fell 8.8 per cent after the French low-cost telecom operator said it would continue its pursuit of T-Mobile US, even though the owner of the US mobile operator, Deutsche Telekom, had rebuffed its first bid as too low.