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Europe stocks reverse gains

by Jonathan Adams
stocks reverse

The Stoxx Europe 600 index gained 0.2%, the CAC 40 was up 0.4%, but the DAX and the FTSE 100 index dropped 0.1%

European stocks closed higher on Monday but gave back earlier gains driven by vaccine hopes and a flurry of M&A activity.

The Stoxx Europe 600 index rose 0.2% after ending last week nearly 1.7% higher, the best weekly return since the week ending August 7. The French CAC 40 rose 0.4%, but the German DAX and the FTSE 100 index fell 0.1%.

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.

European stocks faded in the afternoon despite a strong start on Wall Street. The Dow Jones Industrial Average climbed 1.4%, or 377 points, in early trading, while the S&P 500 was 1.7% up and the Nasdaq was 2.4% higher.

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

Pfizer Inc.’s PFE 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 chip equipment maker ASML Holding NV up 0.9%.

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 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 2.5% and London Stock Exchange shares fell 0.8%.

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