Europe open: Shares higher as Neles-Valmet merger boosts sentiment
European shares opened higher on Friday as a merger between Finnish industrial firms Valmet and Neles boosted sentiment.
The pan-European STOXX 600 index rose 0.39%. Investors were also awaiting a US monthly jobs report later in the day with a consensus forecast of 690,000 jobs to have been added in June, compared to a lower-than-expected figure of 559,000 in May.
“A particularly strong reading would raise fresh questions of the Federal Reserve policy, although there is mounting evidence that a shortage of labour could imply that wage inflation is on the way,” said Richard Hunter, head of markets at Interactive Investor.
“This follows on from a reading of manufacturing activity which remained positive, but at a lighter clip than the previous month, partly fuelled by a lack of available workers.”
“Even so, the fact remains that for the moment the Fed is retaining its accommodative stance, with the likelihood of tapering and particularly interest rate rises not on the immediate horizon. Complemented by the multi-trillion dollar stimulus packages being introduced by the White House, conditions are set fair for further economic recovery.”
In equity news, Finnish industrial firms Valmet and Neles said they have agreed to merge, forming a combined company that will provide enhanced growth opportunities and benefit from broader revenue and cost synergies.
Neles shares topped the Stoxx on the news, rising 10.1% while Valmet was down 5.6%.
UK housebuilders Bellway and Barratt were gainers after a ‘buy’ recommendation from broker Jefferies.
Shares in Danish endoscopy, diagnostic and life-supporting equipment maker Ambu fell to the bottom of the Stoxx, down 11.3%, after the firm lowered revenue growth and earnings guidance due to a slower recovery of elective procedures than expected Covid pandemic from the and shipment delays impacting its core portfolio caused by global container freight market congestion.