Europe’s top shares rose yesterday, led by health care stocks after well-received acquisitions in the sector, with gains capped by steep drops for broadcaster BSkyB and insurer RSA.
Spanish pharmaceutical firm Grifols gained 4.5 per cent after acquiring a blood transfusion testing unit from Novartis, while Shire rose 0.9 per cent after strengthening its portfolio in a $4.2 billion deal to acquire ViroPharma.
“Usually it’s better to be the acquired than the acquirer, but the market seems to like these deals. Shire said the deal would help earnings in the first year though, which was somewhat comforting,” Mike Ingram, analyst at BGC Partners, said.
“A pick-up in M&A activity is in general good.”
The FTSEurofirst 300 closed 0.3 per cent higher to 1,298.52 points, building on five straight weeks of gains, while the euro zone’s blue-chip Euro STOXX 50 firmed 0.6 per cent to 3,052.83 points.
Technical analysts were bullish on the Euro STOXX 50, which rose well above its 20-day moving average at 3,036. Craig Erlam at Alpari targeted 3,106, the five-year high hit last week.
But BSkyB and RSA nursed double-digit percentage falls.
Britain’s dominant pay-TV operator shed 10.9 per cent to 833.5 pence in brisk trade as investors recoiled from the group’s loss of Champions League soccer rights to BT, which rose 0.4 per cent.
Analysts said the defeat also raised the likelihood that BSkyB would have to bid very aggressively to keep the English Premier League rights when they next comes up for auction.
“This may be an overreaction, but with BSkyB appearing to be losing their grip on content exclusivity and the price bar now being raised for the Barclays Premiership the only real winners here appear to be the football clubs,” Mike McCudden, head of derivatives at Interactive Investor, said.
Trading volume in BSkyB stood at 460 per cent of its 90-day daily average, against the FTSEurofirst 300 on 35 per cent.
Britain’s largest general insurer RSA was also down 10.5 per cent, in volume eight times its 90-day average, on news it is probing losses and premiums at its Irish unit stretching back at least two years after an internal audit triggered the group’s second profit warning in a week.