European stock markets were steady yesterday, despite major cross-border takeover activity, with investors buying up the euro ahead of an expected interest rate hike by the ECB.
With most bourses trading in a narrow range throughout the day, London’s FTSE 100 index of leading shares ended up 0.12 per cent to 6,016.98 points.
In Paris the CAC 40 fell 0.29 per cent to 4,042.92 points and in Frankfurt the DAX was marginally down, by 0.06 per cent, to finish the day on 7,175.33 points.
British mobile phone giant Vodafone confirmed Monday that it was selling its 44 per cent stake in French rival SFR to media group Vivendi for €7.75 billion in cash.
Vodafone said it would return £4.0 billion (€4.5 billion) of the net proceeds to its shareholders by way of buying back shares, while the remainder would be used to reduce the company’s debt.
That news left Vodafone’s share price slightly down, by 0.14 per cent, while in Paris Vivendi climbed 0.58 per cent.
Elsewhere yesterday, Belgian chemicals and plastics group Solvay made a friendly takeover bid for its French rival Rhodia worth €3.4 billion to create a world leader in the sector.
Solvay said it was offering €31.60 per Rhodia share, a 50 per cent premium to the closing share price on Friday. In Paris, Rhodia shares jumped by 48 per cent on the news.
Throughout the rest of Europe, stock markets displayed the same narrow, directionless trading, with Brussels making the largest upwards movement, 0.65 per cent on the day.
Milan was also in positive territory, up 0.18 per cent, while the Lisbon bourse made gains of a mere 0.09 per cent.
In the red were the Swiss bourse, which fell 0.39 per cent yesterday, and Amsterdam down 0.12 per cent.
More attention was on the foreign exchange markets, where the euro gained against the dollar yesterday with investors anticipating an interest hike by the European Central Bank this week.
The single European currency, after briefly reaching five-month highs, was changing hands late yesterday in Europe for $1.4233 against $1.4225 on Friday.
US stocks were also trading flat, struggling to maintain last week’s rally on a positive jobs report as investors awaited a speech from Federal Reserve chairman Ben Bernanke. After opening with modest gains, the Dow Jones Industrial Average was up a mere 0.08 per cent to 12,386.83 by 1445 GMT, while the tech-heavy Nasdaq Composite edged up 0.56 points.
The S&P 500-stock index, a broader measure of the markets, advanced a scant 0.31 point to 1,332.72.
In a week light on major economic and company earnings releases, Wall Street was expected to focus on a speech by Mr Bernanke at a conference hosted by the Atlanta Fed.
Japanese shares also ended mixed as the better-than-expected US jobs data and a weak yen were offset by worries over the ongoing battle to avoid a catastrophe at the crippled Fukushima nuclear plant, traders said.
The Nikkei index of the Tokyo Stock Exchange rose 0.11 per cent to 9,718.89 points while the Topix index of all first section shares fell 0.33 per cent.
The US jobless rate fell for the fourth straight month in March, to 8.8 per cent from 8.9 per cent in February.
It was the lowest level of unemployment since March 2009, thanks to stronger job creation, the US Labour Department said in a report signalling a turnaround in the troubled labour market.