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Vaccine Hopes and M&A Action Power European Stocks

European stocks marched higher on Monday, alongside U.S. equity futures, driven by vaccine hopes, mergers and acquisitions news.

The Stoxx Europe 600 index rose 0.5% after ending last week nearly 1.7% higher, the best weekly return since the week ending August 7. The German DAX gained 0.6%, the French CAC 40 rose 0.9% and the FTSE 100 index gained 0.3% as well.

Investors will hear from the Federal Reserve, the Bank of England and the Bank of Japan in the coming days in a busy week for central bank meetings.

Wall Street was also pointing to a stronger start, with Nasdaq-100 futures surging 200 points, or 1.2%, while S&P 500 futures rallied 37.47 points, or 1.4%, and Dow Jones Industrial Average futures jumped 340 points, or 1.3%.

Those gains came on the heels of a losing week for Wall Street, with the Dow dropping 1.7%, the S&P 500 falling 2.5% and the Nasdaq dropping 4.1%, its worst weekly loss since the week ending March 20.

Renewed hopes over a coronavirus vaccine also helped improved sentiment at the beginning of the week.

Pfizer Inc.’s chief executive officer Albert Bourla said in an interview Sunday that the drug maker should know if its COVID-19 vaccine candidate will work by the end of October — and if approved, it could be distributed in the U.S. by the end of the year. Pfizer is partnering with German drug maker BioNTech on the vaccine’s development.

Oxford University also announced Saturday it would resume a trial for the coronavirus candidate it’s developing with AstraZeneca. The study was halted last week following a U.K. patient falling ill pending a review into the “unexplained illness.” Oxford University said it has been deemed safe to continue. Shares of AstraZeneca rose 0.5%.

U.S.-based Gilead Sciences Inc. announced a $21 billion deal on Sunday to buy biotech Immunomedics Inc., maker of a key breast-cancer drug.

Japanese technology conglomerate SoftBank Group Corp. announced a $40 billion deal late Sunday to sell U.K.-based microprocessor designer Arm Holdings to chipmaker Nvidia for a mix of cash and stock.

The technology sector was also lifted by M&A, with shares of German software group SAP SE up 0.5% and chip equipment maker ASML Holding NV up 0.7%.

And the race for TikTok is heating up. Software group Oracle Corp. had been tipped to take over the video-sharing app’s U.S. after China’s ByteDance apparently rejected an offer from technology giant Microsoft Corp. But in the latest twist, Chinese state media say ByteDance has turned down Oracle as well.

Elsewhere, Euronext NV said Monday that it has submitted a non-binding offer to acquire Borsa Italiana from London Stock Exchange Group PLC. The pan-European exchange partnered with Italian lenders Cassa Depositi e Prestiti Equity and Intesa Sanpaolo SpA on the offer. Euronext shares slipped 0.2% and London Stock Exchange shares rose 0.5%.

Source: Marketwatch


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