Markets

European Stocks Close Higher, Tracking Positive Global Sentiment; Meggitt Soars 55%

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  • The pan-European Stoxx 600 provisionally ended 0.6% higher, with retail stocks adding 1.8% to lead gains while insurance stocks slid 0.6% lower.
  • German insurer Allianz saw its shares slide 7.5% to the bottom of the Stoxx 600 on Monday after the U.S. Department of Justice opened an investigation into Allianz Global Investors' Structured Alpha Funds unit.
  • U.S. industrial firm Parker-Hannifin said Monday that it has agreed to buy British rival Meggitt for £6.3 billion ($8.76 billion), sending Meggit shares soaring more than 55%.

LONDON — European stocks closed higher on Monday, tracking positive sentiment around the world as deal speculation and earnings drove significant share price moves.

The pan-European Stoxx 600 provisionally ended 0.6% higher, with retail stocks adding 1.8% to lead gains while insurance stocks slid 0.6% lower.

Shares in Asia-Pacific climbed on Monday as investors picked up bargains following a recent rout, while data showed Chinese manufacturing activity growth slowed in July.

Stateside, U.S. stocks rose on Monday as strong earnings and bipartisan progress on a wide-ranging $1 trillion infrastructure bill overrode concerns about the spread of the delta Covid-19 variant.

In Europe, automakers' lobby CCFA-PFA said Sunday that the global semiconductor shortage and surging infections are hindering rebound prospects for the French auto market.

Meanwhile, the U.K.'s Sunday Times has reported that private equity firm Clayton, Dubilier & Rice is preparing a fresh counteroffer to take over British supermarket chain Morrisons.

U.S. industrial firm Parker-Hannifin said Monday that it has agreed to buy British rival Meggitt for £6.3 billion ($8.76 billion), sending Meggit shares soaring more than 55%.

German insurer Allianz saw its shares slide 7.5% to the bottom of the Stoxx 600 on Monday after the U.S. Department of Justice opened an investigation into Allianz Global Investors' Structured Alpha Funds unit.

On the data front, final Markit manufacturing PMI (purchasing managers' index) readings for July showed euro zone factory activity continuing to accelerate at breakneck speed despite shortages of raw materials and rising costs. The final reading came in at 62.8, down from June's all-time high of 63.4 but ahead of a preliminary estimate of 62.6.

U.K. manufacturing activity slowed to 60.4 from June's 63.9, having peaked at a record 65.6 in May.

Earnings

Earnings are in focus once again in Europe on Monday, with Heineken, AXA and HSBC among the big names reporting.

HSBC beat expectations to more than double first-half pre-tax profit from a year ago to $10.84 billion, sending the British bank's London-listed shares 0.3% lower.

Heineken also doubled its first-half operating profit to 1.63 billion euros ($1.93 billion) but warned of rising costs. Shares of the world's second-largest brewer gained 0.3%.

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