By Herbert Lash
NEW YORK (Reuters) - Shares of AstraZeneca surged on Monday after a takeover offer, lifting global equity markets on speculation of further corporate deal-making, while crude oil prices fell on increased U.S. sanctions against Russia over the Ukraine crisis.
U.S. drugmaker Pfizer Inc said it made a 58.8 billion pound ($98.9 billion) bid for Britain's AstraZeneca Plc after having two bids rejected, pushing shares in the healthcare industry higher.
AstraZeneca rallied 15 percent in London, while Pfizer rose 4.6 percent on Wall Street, the biggest gainer in the Dow Industrials and second-biggest by percentage in the benchmark S&P 500 index.
In Germany, shares of Bayer rose 4 percent, lifted by a wave of pharmaceuticals sector merger speculation.
On Wall Street, the healthcare sector rose 1 percent, or about one-fifth of the S&P 500's gains.
"Thanks to central banks' massive (provision of) liquidity, a lot of companies are now looking for takeover targets across the board, which is very positive for the market," said Lionel Jardin, head of institutional sales at Assya Capital in Paris.
MSCI's measure of global equity markets, the all-country world index, edged up 0.04 percent. The pan-European FTSEurofirst 300 index was up 0.25 percent.
The Dow Jones industrial average rose as much as 134.32 points, or 0.82 percent, but subsequently pulled back to trade up 65.25 points, or 0.40 percent, at 16,426.71. The Standard & Poor's 500 Index was up 2.54 points, or 0.14 percent, at 1,865.94. The Nasdaq Composite Index was down 11.13 points, or 0.27 percent, at 4,064.43.
Brent crude oil slipped below $110 a barrel. U.S. President Barack Obama announced a third round of sanctions against Russian individuals and companies aimed at stopping President Vladimir Putin from fomenting rebellion in eastern Ukraine.
June Brent eased 93 cents at $108.65 a barrel. U.S. crude for June delivery fell 18 cents to $100.42 a barrel.
The euro hit a two-week high against the U.S. dollar, helped by both safe-haven flows due to the Ukraine crisis and expectations euro zone inflation will show an increase this week, lessening the need for looser monetary policy.
"Since the onset of the Ukraine crisis the euro has benefited. We expect that pattern to continue," said Michael Woolfolk, global markets strategist at BNY Mellon in New York.
The euro reached a session high $1.3905 before slipping to $1.3842, up 0.08 percent.
Euro support also came from a spike in overnight euro zone rates as surplus cash in the banking system decreased, with banks repaying cheaper loans taken earlier from the central bank.
The dollar rose 0.37 percent to 102.53 yen.
U.S. Treasury prices fell as investors embraced riskier assets and upbeat housing numbers that strengthened the view that the world's largest economy was steadily recovering.
The benchmark 10-year U.S. Treasury note fell 8/32 in price to yield 2.695 percent.
(Reporting by Herbert Lash; Additional reporting by Sujata Rao in London; Editing by Dan Grebler)