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Syngenta deal clearance gives European stocks a lift
August 22, 2016 / 8:40 AM / a year ago

Syngenta deal clearance gives European stocks a lift

LONDON (Reuters) - European markets bounced back on Monday, recovering from a sharp fall over the previous week as Swiss chemical company Syngenta jumped after a bid for it by ChemChina was cleared by a U.S. watchdog.

Syngenta (SYNN.S) was up 11.9 percent, the top STOXX Europe 600 riser after U.S. regulator CFIUS cleared ChemChina’s $43 billion takeover, removing significant uncertainty over whether the acquisition of the world’s largest pesticides maker will be completed.

Analysts at BAADER Helvea said that the market had questioned whether the deal would be approved, but other regulatory hurdles posed less of a risk.

The stock contributed 35 points to Switzerland's SMI .SSMI index, and accounted for around half of its gains. The index was up 0.9 percent.

The STOXX 600 rose 0.8 percent, stabilising after posting its biggest weekly drop since June on Friday. It fell away after it hit its highest level since Britain voted to leave the European Union.

“The market got very expensive, and it had rallied in very thin volume,” said Zeg Choudhry, managing director at LONTRAD.

“But underneath, the market is being supported by easy money and it’s not feeling like there will be a more substantial correction.”

Shares of Teleperformance (ROCH.PA), an investor favourite following the Brexit vote, rose 8.6 percent, hitting a record high after agreeing to buy LanguageLine Solutions.

Irish clean energy company Kingspan (KSP.I) rose 5.2 percent after profit and revenue beat expectations. The company also said it had seen no impact on trading so far from June’s Brexit vote.

Among fallers, Getinge (GETIb.ST) dropped 3.4 percent after the firing of CEO Alex Myers after just 17 months.

“The disagreement appears to revolve around the execution of the restructuring rather than the plan itself,” analysts at Jefferies said in a note.

“However, the departure of Mr. Myers raises significant questions about the future direction and execution of this programme.”

Basic resources .SXPP fell 1.2 percent, the only sector in negative territory, weighed down by a drop in mining stocks.

Oil & Gas .SXEP shares also underperformed, up 0.1 percent as dollar-denominated commodity prices came under pressure from a rise in the greenback. Chinese export data fuelled concerns over market oversupply.

editing by John Stonestreet

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