European stocks steady on M&A support; virus worries persist

(Reuters) – European stock markets were steady on Wednesday as a couple of takeover deals in the region helped offset worries about fresh lockdown measures to battle a surge in coronavirus cases.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 17, 2020. REUTERS/Staff

The pan-European STOXX 600 traded flat after opening slightly lower, helped by gains in retail and technology sectors.

The benchmark index reclaimed late-February highs on Monday after encouraging COVID-19 vaccine updates from drugmaker Moderna and Pfizer last week.

“A lot of good news has happened. Markets are looking for the next bit of good news, and it may be a little difficult at this time,” ETX Capital analyst Michael Baker said.

Investors turned jittery as the number of reported global daily deaths from the novel coronavirus stood at the highest ever on Tuesday, according to a Reuters tally.

Britain reported the highest number of deaths in Europe.

M&A activity, however, helped European bourses recoup early losses.

Britain’s RSA Insurance gained 3.8% after it said it had received a cash offer worth 7.2 billion pounds ($9.55 billion) from Canadian peer Intact Financial and Danish insurer Tryg.

Deutsche Boerse rose 2.3% after the German stock exchange operator said it would acquire an 80% stake in corporate governance adviser Institutional Shareholder Services (ISS) for about $1.8 billion.

French game maker Ubisoft jumped 4.9% to the top of STOXX 600 after it said that its Assassin’s Creed Valhalla is best selling game in the series to date.

British software company Micro Focus International surged 26.2% to the top of UK’s mid-cap index after it forecast annual margins at the upper end of its expectations.

Despite the two-day wobble, the STOXX 600 remains on track for its best month on record as investors bet on a global economic recovery, supported by trillions of dollars in stimulus and hopes of a vaccine.

Among decliners, German automotive supplier Schaeffler fell 6.8% after it set mid-term sales targets that disappointed investors.

Shipping group Maersk slipped 1.7% after it reported quarterly sales and operating profit in line with previous forecast and maintained its earnings forecast.

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