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Europe: Shares end at one-month high as weaker euro lifts autos
[LONDON] European shares rose on Tuesday, with exchange operator London Stock Exchange (LSE) hitting record highs on speculation of a possible bidding war and auto stocks boosted by continued weakness in the euro.
Shares in LSE rose 7.2 per cent after US rival ICE said it was considering making an offer for the group, a move that could derail Deutsche Boerse's potential tie-up with the British company. Deutsche Boerse was little changed. "With ICE now also being interested, it looks ... more likely for a deal to be done," said Dafydd Davies, partner at Charles Hanover Investments.
The pan-European FTSEurofirst 300 index closed up 1.5 per cent at 1,332.95 points, its highest level since Feb 1.
The index extended earlier gains after stronger than expected US manufacturing data sent the euro - already weakened by a poor euro zone manufacturing survey - to a fresh one-month low against the dollar.
The weaker euro in turn boosted shares in auto firms, which benefit from currency weakness because that makes exports cheaper. The STOXX Europe 600 Auto index rose 3.1 per cent, making it the biggest sectoral gainer. "The market and auto stocks are supported by the lower euro," said Stefan de Schutter, trader at Alpha Trading in Frankfurt, adding that relatively upbeat newsflow about the Chinese market from the Geneva car show also helped.
Glencore underperformed a positive mining sector after reporting US$5.8 billion of charges, mostly due to a slide in commodity prices, and a 32 per cent fall in 2015 core profit.
Its shares fell 2 per cent, with traders linking the fall to profit-taking after a recent strong run and to management comments surrounding the urgency of asset sales to cut debt.
Barclays fell 8.1 per cent after the British bank posted lower profits, slashed its dividend and announced a restructuring entailing the sale of its Africa business.