European shares choppy as Bayer, Fiat come under pressure – Morningstar.com

Posted: Monday, May 23, 2016

By Carla Mozee, MarketWatch

Bayer drops after $62 billion bid for Monsanto

European stocks were choppy Monday as investors assessed eurozone economic data and as shares of Bayer AG and Fiat Chrysler Automobiles NV struggled.

The Stoxx Europe 600 edged up 0.1% to 338.29. It had been down by as much as 0.8% just before data showed slowing in economic activity in the eurozone (http://www.marketwatch.com/story/eurozone-pmis-show-economic-activity-slowing-2016-05-23) in May. Markit said its eurozone composite purchasing managers index, fell to 52.9. Economists surveyed by The Wall Street Journal last week had expected a rise to 53.2.

Major equity indexes flipped higher as the euro pulled back to $1.1201 from around $1.1222 ahead of the report. Euro strength can make prices for European exports more expensive for holders of other currencies to buy.

“Any indications that the [European Central Bank] is ready to up the ante in terms of the assets purchased as well as perhaps being more creative in respect of the variety of assets could well be the catalyst needed to push the single currency lower,” said Brenda Kelly, head of analysts at London Capital Group, in a note.

With heavy exposure to exporters, Germany’s DAX 30 had risen by as much as 0.6% as the euro slipped. But the index eventually dipped back down by 0.1%.

At the bottom of the DAX were shares of Bayer AG (BAYN.XE). They dropped 2.7% after the drug and chemicals maker said it made an all-cash offer to buy Monsanto Co. (MON) for $62 billion, or $122 a share (http://www.marketwatch.com/story/bayer-makes-62-billion-bid-to-take-over-monsanto-2016-05-23). The bid values Monsanto at 37% over the company’s May 9 closing share price, the day before it made a written proposal to the U.S. company, said Bayer.

Meanwhile, shares of Fiat Chrysler Automobiles NV (FCA.MI) were down 3.4% after a report by German newspaper Bild (http://www.bild.de/bild-plus/geld/wirtschaft/abgas-skandal/auch-fiat-betruegt-mit-illegaler-software-45905214,var=a,view=conversionToLogin.bild.html) that German regulators suspect the auto maker of using illegal software to cheat on emissions tests. Fiat last week declined to meet with regulators to discuss the issue.

Fiat weighed on Italy’s FTSE MIB , which was down 1.7% to 17,516.45.

Indexes: Greece’s Athex Composite picked up 1% at 646.42 after Greek lawmakers Sunday approved new tax and austerity reforms (http://www.marketwatch.com/story/greek-parliament-approves-austerity-vote-2016-05-22) in an effort to receive more bailout money from its country’s creditors.

France’s CAC 40 was off 0.3% at 4,339.17, and the U.K’s FTSE 100 narrowed its loss to 2 points at 6,154.42. Spain’s IBEX 35 shed 0.7% at 8,712.10.

The Stoxx 600 on Friday rose 1.2% (http://www.marketwatch.com/story/european-shares-rise-as-oil-prices-gain-2016-05-20), locking in a second straight weekly gain for the pan-European index.

Movers: Cie. Financière Richemont (CFR.EB) lost 2.5% in the wake of ratings downgrades to neutral at both Citi and J.P. Morgan. The moves come after the Cartier parent last week issued a gloomy outlook for the luxury market.

Ryanair Holdings PLC shares were up 1.5% as the budget airline said yearly sales rose 18% and profit climbed 43% (http://www.marketwatch.com/story/ryanair-warns-profit-growth-will-slow-2016-05-23). But the company also said profit growth would slow this year.

-Carla Mozee; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

05-23-16 0615ET

Copyright (c) 2016 Dow Jones & Company, Inc.

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