Pharma deals give stocks a lift
LONDON (AP) — A flurry of deals in the pharmaceutical sector helped to shore up global stock markets on Tuesday.
Amid a relative dearth of economic data and the lack of fresh news in Ukraine, investors are focusing on the latest batch of U.S. corporate earnings and the slew of developments in the pharmaceuticals industry.
The already solid backdrop in markets was reinforced by a run of deals among drugmakers. Notably, Switzerland's Novartis unveiled a series of multibillion-dollar deals with Britain's GlaxoSmithKline PLC and the U.S.'s Eli Lilly & Co. that could herald further restructuring in the fast-changing industry.
The deals have come amid a reported takeover attempt of AstraZeneca by Pfizer. And, on Monday Canadian drugmaker Valeant Pharmaceuticals International Inc. said it teamed up with activist investor Bill Ackman in a bid for Botox maker Allergan that could be worth about $40 billion.
Analysts said the deals could trigger some further activity in the months ahead.
Drug stocks in Europe and the U.S. have pushed ahead in light of the deals and the mounting speculation over a potential wave of mergers and acquisitions in the sector over the months ahead.
"It's all kicking off in the pharmaceutical sector," said Louise Cooper of CooperCity.
In Europe, the FTSE 100 index of leading British shares closed up 0.8 percent at 6,681.76 with GlaxoSmithKline and AstraZeneca leading the way. Similarly, Germany's DAX was boosted by drug stocks Merck and Bayer and ended 2 percent higher at 9,600.09. And on France's CAC-40, Sanofi was one of the top risers, helping the index to end 1.2 percent higher at 4,484.21.
On Wall Street, the Dow Jones industrial average was up 0.6 percent at 16,542 while the broader S&P 500 index rose 0.5 percent to 1,881. U.S. stocks have largely recovered their poise over the past few sessions following a run of solid corporate earnings statements, from the likes of Goldman Sachs and Morgan Stanley as well as Netflix.
"Sentiment is boosted, above all, by the generally positive U.S. first quarter earnings results," said Fawad Razaqzada, a technical analyst at Forex.com.
Earlier in Asia, stock markets were less rosy. Tokyo's Nikkei 225 benchmark index fell 0.9 percent to close at 14,388.77 while South Korea's Kospi edged 0.3 percent higher to 2,004.22. Hong Kong's Hang Seng slipped 0.1 percent to 22,730.68 while the Shanghai Composite index advanced 0.3 percent to 2,072.83.
In the currency markets, the mood was fairly flat with the euro steady at $1.3796 and the dollar down 0.1 percent at 102.60 yen.
