European shares retreat after strong surge; trade talks, banks M&A on tap

  • Reuters
  • Stock Market News
European shares retreat after strong surge; trade talks, banks M&A on tap
Credit: © Reuters.

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April 4 (Reuters) - European stocks took a breather on Thursday after hitting an eight-month high in the previous session, with banking mergers in focus while investors awaited more developments in U.S.-China trade talks.

At 0720 GMT, the pan-European STOXX 600 index .STOXX was down 0.4 percent, having risen more than 3 percent climb in the previous four sessions on hopes that a U.S.-China trade deal could be imminent after both sides reported progress. CBKG.DE shares rose 3 percent as the race to acquire the German lender heated up. The Financial Times reported that Italy's UniCredit CRDI.MI was preparing a bid as Deutsche Bank's DBKGn.DE attempt faces obstacles. FT said UniCredit was unlikely to gatecrash current merger negotiations with Deutsche but might make a move if these fell apart.

The news is likely to rekindle expectations of further consolidation in the battered European banking sector .SX7P , which has underperformed the STOXX 600 this year. It was also among leading decliners on Thursday.

Britain's exporter-heavy FTSE 100 .FTSE continued to be pressured by a rise in sterling, boosted by hopes of progress or at least a longer Brexit delay as Prime Minister Theresa May seeks a joint approach with opposition leader Jeremy Corbyn to end a parliamentary deadlock. sentiment was data out of Germany that showed an unexpected drop in industrial orders in February, hit by a slump in foreign demand. Plc SAGAG.L shares crashed nearly 40 percent, on course for its worst daily performance, after the over-50s tourism and insurance firm forecast lower annual underlying pretax profit and cut its dividend as it struggles to keep up in a competitive motor and home insurance sector. maker Thyssenkrupp TKAG.DE fell 1.5 percent as workers demanded substantial guarantees for jobs and plants even if a planned joint venture with India's Tata Steel TISC.NS falls apart. NOVN.S dipped after an influential non-profit organisation said the $4 million to $5 million value put on a course of its experimental gene therapy for spinal muscular atrophy (SMA) is excessive. bright spots was the British home repairs provider HomeServe Plc HSV.L , which led gains on the STOXX after forecasting full-year adjusted pretax profit at the upper end of market expectations.

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