European Markets Climb as Investors Await U.S. Trade Moves; Mergers and Energy Shifts Also in Focus
European stocks ended Monday’s trading session mostly higher as investors looked ahead to potential U.S. trade deal announcements. The Stoxx Europe 600 index rose by 0.4%, supported by gains in France’s CAC 40 and Germany’s DAX, which climbed 0.4% and 1.1% respectively. The FTSE 100 in the UK was the outlier, dipping by 0.2%. Investors were reacting to comments from U.S. Treasury Secretary Scott Bessent, who hinted at several upcoming trade developments, though no countries were specifically named.
Among corporate news, French tech firm Capgemini announced its acquisition of U.S.-listed WNS in a $3.3 billion cash deal, pushing WNS shares up by over 15% in pre-market trade. Despite the positive reaction to the takeover from WNS investors, Capgemini’s own stock dropped by 2.7%, reflecting market uncertainty about the large cash outlay. Capgemini said it aims to leverage WNS’s strengths in AI and tech outsourcing services as it expands its capabilities.
In the retail sector, Currys plc fell by 5.5% after RBC Capital downgraded the stock to “Sector Perform.” Despite its remarkable 180% rise since October 2023, analysts believe the current valuation now reflects its recent turnaround, including the sale of its Greek operations and focus on profitable core markets. The company has also been in the spotlight for rejecting a takeover offer from activist investor Elliot Management earlier this year.
Elsewhere, Daimler Truck reported a 20% decline in its North American sales for Q2, while its Asia business saw a modest increase. Despite the U.S. being its largest market, shares reacted calmly, ticking up 0.6%. Meanwhile, Shell shares dipped more than 2% after the company issued a disappointing second-quarter trading update. It revised down its production guidance and warned of significantly weaker performance in both its integrated gas and chemicals trading units.
Additional headlines included a report that UK energy supplier Octopus Energy is planning a $13.6 billion demerger of its Kraken tech unit within a year, and news that China is retaliating against the EU’s trade ban by imposing import restrictions on European medical devices. In global politics, U.S. President Donald Trump threatened a 10% tariff on nations aligning with BRICS, stoking trade tensions further ahead of the bloc’s summit in Brazil.
Source: CNBC