Eurofirst 300 reaches four-year high
Following the lead of the London equities markets on Tuesday, the FTSE Eurofirst 300 gained 0.9 percent to 1,201.09 on the strength of gains in the utilities sector.
It was the Eurofirst’s highest close since May 2002.
Spain’s largest electricity generator, Endsea, gained 8.1 percent to €20.63 while its board met to consider an offer from the smaller gas distributor and wholesaler, Gas Natural.
At a worth of €22.55 billion, if the deal goes through it would be the largest European merger this year. However, Natural Gas lost 1.8 percent to €23.34 when BNP Paribas called the deal “not very attractive” and downgraded the Barcelona-based company to “under perform”.
Elsewhere in the sector, Iberdrola, Endsea’s largest competitor, was up 3.5 percent to €22.27 and Union Fenosa, a smaller Spanish utility, added 1.2 percent to €25.48. Germany’s Eon gained 0.2 percent to €80.80 on the rumor that it might bid for UK utility Scottish Power.
The banking sector also saw gains. Deutsche Bank gained 4.8 percent to €76.14, its highest level in a year and a half, as Merrill Lynch upgraded it to “buy”. Spanish bank BBVA, also upgraded to “buy” by Merrill Lynch, added 1.2 percent to €13.97.
Meanwhile, ABN was up 1.3 percent to €19.71, while Lloyds TSB gained 1.6 percent on the day. In the insurance sector, French company AXA gained 2.3 percent to €22.14 as in announced a more-than-expected rise in profits for the half-year and said it was still on track to have strong earnings in 2005 in spite of Hurricane Katrina.