Eurofirst gains on oil, banks

Equities markets in Europe saw advances on Monday on the strength of gains the oil sector as the FTSE Eurofirst gained 0.2 percent to 1,345.92, a new four and a half year high.

The oil sector was up on higher crude oil prices. Statoil gained 3.5 percent to €178. Meanwhile Saipem, the largest oil field services company in Europe, was up 3.1 percent to €16.04.

The banking sector was also up, with more takeover talk in Italian banking. Mediobanca, rumored to be a target despite an agreement that gives core shareholders 54 percent of the bank, was up 4.2 percent to a record high share prices of €17.60. Capitalia, also seen as a potential takeover target, gained 2.8 percent to €6.325. Meanwhile, EFG Eurobank was up 4 percent to €33.06 as JP Morgan raised its price target from €40 to €44 on the strength of the bank’s expansion in southeastern and central Europe.

Utilities were up on the day as well, with Electricite de France gaining 2.2 percent to €41.56 on consolidation talk. Eon gained 0.6 percent to €93.44 after its chief executive said he expects that three dominant players will emerge in the sector.

The pharmaceuticals sector was mixed. Schering was up 3.3 percent to €58.39 on an announcement that its fourth-quarter operating profits were up 30 percent, slightly higher than forecasts. It also said that it will buy the property and equipment used by its US partner, Chiron, to produce the drug Betaferon (Betaseron in the US), which is expected to be approved for the treatment of early-stage multiple sclerosis before the end of the third quarter. Shares in Novartis, which has not yet finalized its planned purchase of Chiron, was up 0.1 percent to SFr71.50.

Elsewhere in the sector, Serono dropped 2.2 percent to SFr959 as concern grew about competition between its multiple sclerosis drug Rebif with Betaferon. Sanofi-Aventis dropped 3 percent to €71.70 after regulators in the United States delayed final approval of Acomplia as a weight management treatment and rejected the drug as a stop-smoking aid.

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