Global stocks boosted by M&A pipeline, Fed outlook

Reuters

Published Apr 07, 2015 05:25AM ET

Global stocks boosted by M&A pipeline, Fed outlook

By Jamie McGeever

LONDON (Reuters) - Global stocks rose on Tuesday, as many European bourses re-opening after the Easter break took on the positive tone set by U.S. markets overnight, with sentiment boosted by a potential trans-Atlantic acquisition.

FedEx Corp (N:FDX) made a 4.4 billion-euro ($4.8 billion) bid to buy Dutch package-delivery company TNT Express (AS:TNTE), sending TNT shares jumping almost a third in value and lifting shares across the sector and beyond.

The M&A feel-good factor for stocks dovetailed with generally low government bond yields, as expectations of the first U.S. interest rate increase since June 2006 continue to cool after last Friday's relatively weak employment data.

The pan-European FTSEurofirst index of leading 300 shares was up 1 percent in early trade at 1602 points (FTEU3). Shares in TNT Express were up 31 percent, easily the biggest gainers in Europe.

Germany's DAX (GDAXI), France's CAC 40 (FCHI) and Britain's FTSE 100 (FTSE) were also up 1 percent. Spain's IBEX reached its highest level since January 2010 (IBEX).

"Mergers and accusation news is back today in full throttle after FedEx announced their desire to take over TNT Express," said Naeem Islam, chief market analyst at Avatrade.

"The Fed is still data-dependent and any weakness in the economic data is equal to the presence of cheap money. We now have a question mark on a summer rate hike," he said.

U.S. stock futures were pointing to a slightly higher open on Wall Street DJc1 SPc1 NDc1 .

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) gained 0.3 percent, Japan's Nikkei (N225) rose 1.2 percent and Chinese stocks climbed more than 2 percent to a seven-year high as the quarterly earnings season approached (SSEC).

RBA ON HOLD, AUSSIE DOLLAR JUMPS

In currencies, the biggest mover was the Australian dollar, which rallied more than 1 percent after the country's central bank surprised some by leaving interest rates at a record low 2.25 percent.

U.S. crude CLc1 was down 1.4 percent at $51.40 a barrel after rallying 6 percent on Monday. Brent also shed 1.4 percent to $57.31 a barrel LCOc1 following its 5.7 percent jump.