Europe midday: Shares push further into record territory on German merger
European shares set new record highs at midday on Tuesday as investors cheered an €18bn takeover of German property group Deutsche Wohnen.
The pan-European STOXX 600 index rose 0.3% to 447.13 points. Germany’s DAX gained 0.73%, also hitting a record high after a long weekend, as residential property group Vonovia agreed to take over its rival.
This overshadowed data showing the German economy shrank more than expected in the first quarter as business morale improved in May, with companies turning more upbeat in the light of falling coronavirus infections and easing of restrictions.
Shares in Deutsche Wohnen surged 15.7%, while Vonovia fell 4%.
UK shares were flat, despite a fall in government borrowing in April, although it remained at its second highest level on record for the month.
Public sector borrowing was £31.7bn, down £15.6bn from the same month last year and marking the first annual fall since the start of the pandemic. The amount was comfortably below the Office for Budget Responsibility’s forecast of £39bn and consensus expectations of £32.4bn.
Shares in AstraZeneca fell as the UK competition regulator said it was starting a probe into its $39bn tie-up with Alexion of the US. Rival drug maker GlaxoSmithKline also fell on the news.
Miners were on the back foot after China said it would strengthen price controls of key commodities, warning against hoarding and speculation in an attempt to slow down price rises.
HeidelbergCement shares rose after US construction materials supplier Martin Marietta Materials said it would buy the German company’s assets in California and Arizona for $2.3bn.