By Barbara Kollmeyer
Europe’s main stock index was headed for its fourth-straight record close on Thursday, as investors cheered a fresh batch of earnings reports and a Roche stake sale by rival Novartis.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -2.00% rose 0.4% to 483.64, putting it on track to surpass Wednesday’s closing high of 481.22. Among major regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX -1.86% gained 0.5%, the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -2.00% increased 0.4% and the U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -2.38% increased 0.2%.
The British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.6724% tumbled against the dollar, and gilt yields fell /zigman2/quotes/211347177/realtime BX:TMBMKGB-10Y -1.93% after the Bank of England surprised markets by leaving key interest rates unchanged . Elsewhere, Germany reported a 1.3% rise in manufacturing orders in September, that marked a strong rebound from a revised 8.8% fall in August.
Among companies in focus, shares of heavily-weighted pharmaceutical group Roche /zigman2/quotes/206324342/delayed CH:ROG -1.60% rose 1.3% after Novartis /zigman2/quotes/203243705/composite NVS -0.27% /zigman2/quotes/203286410/delayed CH:NOVN -1.26% said it would sell its roughly one-third voting stake back to its rival for $20.7 billion.
“The purchase should be immediately c.7% EPS [earnings per share] accretive, in our view, helpfully also likely ensuring sustained earnings growth nextyear when COVID-19 sales may cliff,” said a team of Jefferies analysts led by Peter Welford, in a note to clients.
“Importantly we also see the deal lifting the overhang from debate around Roche potentially pursuing larger acquisitions in the near future given its likely net cash position by [year end], which it seeks to avoid,” said Welford.
BT shares /zigman2/quotes/209006687/delayed UK:BT.A -1.66% were among the top gainers, up 7% after the U.K. telecoms giant reported forecast-beating results, days after announcing it had hit its cost-savings targets ahead of schedule.
Elsewhere, Spain’s Telefonica /zigman2/quotes/200416613/delayed ES:TEF -1.52% /zigman2/quotes/207034643/composite TEF -2.57% dropped more than 2% after the telecoms group reported upbeat results, but weakness in its home market.
Also higher were oil companies, with BP /zigman2/quotes/202286639/delayed UK:BP -2.37% /zigman2/quotes/207305210/composite BP -1.18% up 1.8% and Royal Dutch Shell gaining nearly 1%. Share action tracted higher energy prices /zigman2/quotes/209723049/delayed CL00 -1.82% , up on expectations the Organization of the Petroleum Exporting Countries and its allies would not yield to pressure from the U.S. administration to speed up production increases.
A standout gainer was Alstria Office REIT /zigman2/quotes/208413634/delayed XE:AOX +0.07% , which surged nearly 17% after Brookfield Asset Management, via its Alexandrite Lake Lux Holdings private real estate fund, made a €19.50 offer for the German real estate company.
The biggest faller was Lanxess /zigman2/quotes/209215330/delayed XE:LXS -2.32% , which dropped 7% after the speciality chemicals projected full-year adjusted earnings at the lower end of the expected range, and in-line third-quarter earnings.
In London, shares of Pod Point , the electric vehicle charging company majority owned by Electricite de France /zigman2/quotes/201783867/delayed FR:EDF -0.31% traded at 218 pence after pricing its initial public offering at 225 pence , that valued it at £352 million ($480 million).
In economic news, IHS Markit’s October final eurozone composite purchasing managers index fell to 54.2 from 56.2 in September and the services index fell to 54.6 from 56.4.
“Eurozone growth has slowed sharply at the start of the fourth quarter, with manufacturing hamstrung by supply constraints and services losing momentum asthe rebound from lockdowns fades,” Chris Williamson, Chief Business Economist at IHS Markit said.