Shares of the U.K. drugmaker tumbled the most since August 2002 after it rejected Pfizer Inc.’s increased bid. Deutsche Bank AG slid 1.7 percent after Germany’s biggest bank sold about 60 million shares to the Qatari royal family as it said it will raise 8 billion euros ($11 billion) in its second-biggest capital increase. Ryanair climbed 11 percent after forecasting profit growth this year. Alstom SA gained 2.6 percent.
The Stoxx Europe 600 Index lost 0.1 percent to 338.51 at the close of trading in London after falling as much as 0.9 percent earlier. The benchmark gauge rose to a six-year high on May 13 as deals activity increased and European Central Bank President Mario Draghi said officials are ready to ease monetary policy at their June meeting if necessary.
“Disappointment clearly reigns today for pharmaceuticals after AstraZeneca’s rejection,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “The sector has been in a wide consolidation phase and it will be essential for major operations to be performed to gain market share. The markets aren’t pleased with the rejection as it is unlikely Pfizer will return with another attempt.”
The Stoxx 600 climbed for five straight weeks, the longest streak since November 2013. The index added 0.1 percent last week as euro-area economic growth missed estimates and investors watched mixed earnings reports. The benchmark gauge traded at 15.1 times the projected earnings of its members at the end of last week, compared with the five-year average of 12.5, data compiled by Bloomberg show.
“Risk sentiment around European assets is increasingly sending warnings signs,” said Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen. “Earnings have been coming in mixed. The clear focus at the moment is and remains the ECB, which will probably cut rates next month. But the big question is if it will be enough to lift markets further. Valuation aspects are also a part of the tendency towards risk aversion.”
National benchmark indexes advanced in 10 of the 18 western-European markets today. France’s CAC 40 and Germany’s DAX rose 0.3 percent. The U.K.’s FTSE 100 fell 0.2 percent.
Italy’s FTSE MIB Index (FTSEMIB) lost 1.6 percent today. Some 22 companies in the gauge are trading without the right to their latest dividend, shaving off 315.44 points off the stocks benchmark gauge. Shares also fell on concerns voters in the European Parliamentary elections may turn against Prime Minister Matteo Renzi.
AstraZeneca sank 11 percent to 4,287.5 pence after rejecting Pfizer’s sweetened bid as too low. The U.S. company had boosted its offer to 69.4 billion pounds ($117 billion), valuing the London-based company at 55 pounds a share. On May 2, Pfizer offered 50 pounds a share, following a previous bid made in January. AstraZeneca said the offer fails to reflect the value of its pipeline of experimental medicines.
A gauge of European health-care companies posted the worst performance of the 19 industry groups in the Stoxx 600. GlaxoSmithKline Plc slid 1.4 percent to 1,620 pence, and Novartis AG dropped 0.6 percent to 79.70 Swiss francs after climbing for a record 14 straight days.
A gauge of lenders in the Stoxx 600 lost 0.8 percent for the second-largest decline as a group.
Deutsche Bank fell 1.7 percent to 30.20 euros. Paramount Holdings Services Ltd., an investment vehicle of Qatar, purchased 1.75 billion euros of shares at 29.20 euros each, the lender said last night. Deutsche Bank will raise an additional 6.3 billion euros from a rights offer in June, it said.
Ryanair (RYA) jumped 11 percent, the most since October 2008, to 7.02 euros. Europe’s biggest discount airline said profit after tax probably will be 580 million euros to 620 million euros for the year through March 2015, a gain of as much as 19 percent. Earnings after tax fell 8 percent to 523 million euros in the year ended March 31, the company said. That compared with the average analyst estimate of 521 million euros.
Alstom gained 2.6 percent to 28.82 euros. General Electric Co. is in early-stage talks with nuclear-plant maker Areva SA and other French companies about asset sales or partnerships, people familiar with the matter said. GE is seeking approval from France for its $17 billion bid for Alstom and is awaiting direction from the government to see whether it must sell assets to get the deal done, they said.
(A previous version was corrected to say that Ryanair profit exceeded analysts’ estimates.)
To contact the reporter on this story: Corinne Gretler in Zurich at firstname.lastname@example.org
To contact the editors responsible for this story: Cecile Vannucci at email@example.com Srinivasan Sivabalan