EUROPEAN shares made slight gains in thin holiday trade yesterday, as merger deals and news of Osama bin Laden’s death helped push the market to a two-month closing high.
Shares in Demag Cranes rose 24 per cent after US construction machinery maker Terex Corp unveiled a $1.3bn hostile bid for its German rival.
Meanwhile Danish food ingredients and enzymes firm Danisco gained 4.3 per cent after its board urged shareholders to accept DuPont’s sweetened $6.64bn bid.
“I’m dropping strategies using volatility or sector themes to focus on building baskets of undervalued stocks across all sectors that might soon become takeover targets,” said David Thebault, head of quantitative sales trading, at Paris-based Global Equities.
“Even if we get a pull-back on the market, it won’t stop the M&A wave.”
The FTSEurofirst 300 index of top European shares closed 0.02 per cent higher at 1,157.00 points, gaining ground for the eighth consecutive session, although the index closed at the session’s low.
Bin Laden was killed after a decade-long hunt for the al Qaeda leader, reducing investors’ perception of geopolitical risk.
“The death of bin Laden is important news for markets,” said Laurent Baudoin, chief executive of Paris-based Stelphia Asset Management, which has €230m under management.
“Risk aversion should recede, which should be positive for equities while it may have a less favourable impact on commodities, particularly gold.”
Across Europe, France’s CAC 40 gained 0.1 per cent, while Germany’s DAX rose 0.2 per cent to its highest closing level in more than three years.
However, trading was muted as UK markets remained closed for a public holiday.
Commerzbank led the DAX with a 3.2 per cent gain on forecast-beating first quarter earnings, while Swiss company Actelion was one of the biggest losers, falling 8.7 per cent after the company said it may appeal against a jury’s decision in a Californian court to award Asahi Kasei Pharma Corporation up to $547m in a dispute with one of its units.