European stocks rose yesterday, with gains in telecoms and banks offsetting a big fall in Unilever, while uncertainty over political developments and the timing of a US interest rate hike kept the dollar in check.
US markets were closed for holiday and this restricted activity in Europe and Asia.
Unilever shares fell nearly nine per cent at one point after US food company Kraft Heinz Co withdrew on Sunday a proposal for a merger with its larger rival in the face of stiff resistance.
The Anglo-Dutch group’s shares were last down 7.4 per cent and were the day’s biggest fallers.
Despite that slide, the pan-European STOXX 600 index edged up 0.1 per cent to just below a 14-month high touched last week.
A three per cent gain in Deutsche Telekom helped push the index higher after a report that Japan’s SoftBank is prepared to give up control of Sprint to Deutsche Telekom’s T-Mobile US to clinch a merger of the two US wireless carriers.
Royal Bank of Scotland was the day’s biggest gainer as shareholders welcomed a plan to scrap the proposed sale of its Williams & Glyn unit. Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent and back toward a 19-month peak .
Japan’s Nikkei rose 0.1 per cent while China’s blue-chip CSI 300 index closed up 1.5 per cent, its biggest gain in six months, after media reports on Friday that pension money may begin flowing into the market as soon as this week.
The dollar dipped 0.1 per cent against a basket of major currencies after US bond yields fell on Friday.
The euro rose 0.1 per cent to $1.0623 while the yen fell 0.2 per cent to 113.07 per dollar. Sterling rose 0.5 per cent to $1.2466.
The dollar hit its highest against the basket for more than a month last week after US Federal Reserve Chair Janet Yellen said it would be unwise to delay raising interest rates.
The focus in euro zone debt markets was on politics.
French 10-year government bond yields rose after an opinion poll published yesterday showed far-right candidate Marine Len Pen narrowing her centrist and centre-right rivals’ lead in the final round of the presidential election in May.
This pushed the gap over benchmark German 10-year yields to 84 basis points, its widest since late 2012. It later pulled back to 72 bps.
Yields on safe-haven two-year German bonds hit a record low, at minus 0.85 per cent.
Among commodities, oil rose, although an increase in the number of US drilling rigs dragged on the price. Brent crude rose 38 cents a barrel to $56.19.
Copper rose on supply worries after the world’s second-biggest copper mine said it could not deliver promised shipment due to export permit problems. Three-month copper on the London Metal Exchange was up 0.7 per cent at $6,004 a tonne,
Gold edged up 0.2 per cent to $1,237 an ounce.