A good day for the healthcare sector, and underlying strength in rebounding technology stocks, helped Europe to register modest gains although activity was muted by the closure of London for the public holiday.
Surprise news that Swiss pharma giant Novartis had bought a 20 per cent voting stake in an arch-rival, drugs and diagnostic group Roche, gave a powerful boost to both companies yesterday.
The deal, Novartis said, opened up a range of strategic options. That raised the clear prospect of another mega-merger in the Swiss drugs industry, to create a world leader with more than €20 billion a year in pharmaceuticals sales.
In the notoriously volatile high-tech sector, German software company Netlife soared 32.9 per cent to €6.55 on news that it turned profitable in the first quarter. The shares are, however, still well short of the €30.43 achieved in February last year.
Troubled Swedish Internet consultancy Framfab plunged 42 per cent to 1.52 Swedish kroner as an announcement of a share issue to rescue the group failed to soothe investors after Friday's news of disastrous first-quarter losses which prompted the resignation of the entire board.
Airline company Lufthansa continued to rally amid hopes that it would soon settle with its striking pilots. With the pilots' union claiming that a big new offer had been put on the table, the shares rose 2.6 per cent to €22.46 for a two-day rally of 7.6 per cent.
Hopes of a quick settlement allowed investors to refocus on trading fundamentals and a recent upgrade for the stock by Credit Suisse First Boston. Last week, the broker set a target price of €25 and lifted its recommendation to "buy".
Worries about a potential big stock overhang sent utility giant Eon down to the bottom of the FTSE Eurotop 100 performance charts.
More than 15 per cent of the group could shortly change hands if Allianz (with 10 per cent of Eon) and the state of Bavaria go ahead with plans to dispose of their stakes. Eon ended 1.9 per cent lower at €55.33.
Motors were weak in Frankfurt ahead of the first results due this week from Volkswagen and BMW. The former shed 0.7 per cent at €55.11 and BMW 1.1 per cent at €39. DaimlerChrysler came off 0.7 per cent at €56.63.
