Europe and Asia Close Higher

European and Asian stock markets were higher Tuesday. In Europe, markets ended higher on Pfizer's cost-cutting plans. Japanese markets were helped by a fall in oil prices

European stock markets were higher on Tuesday. In London, the Financial Times Stock Exchange 100 gained 46.20 points, or 0.94%, to close at 4942.90. London shares ended on a high note after Allied Domecq confirmed it is in takeover talks with French group Pernod Ricard, while an announcement of cost cuts by Pfizer boosted pharma groups. U.S. stocks trade higher as oil prices remain off yesterday's highs. At home, the pharma sector jumped after U.S. rival Pfizer outlined a $4 billion cost savings plan: GlaxoSmithKline, AstraZeneca, and Shire Pharma all gained in response. Allied Domecq's shares soared after it confirmed talks with French group Pernod Ricard, which is working with U.S. group Fortune Brands, regarding a potential offer. Fellow beverages groups Scottish & Newcastle, Diageo, and SabMiller moved up on the news. British Airways reported March 2005 passenger traffic rose 4.5% year-over-year.

Germany's Dax gained 21.22 points, or 0.49%, to close at 4362.61. German shares closed higher on the back of Wall Street posting gains. U.S. shares reacted positively to a dip in oil prices and were cheered by Pharma giant Pfizer which announced plans to save $4 billion annually by 2008. Locally, MAN paced Dax stocks higher after saying sales and new orders at its commercial vehicles unit rose 15% and 30%, respectively. EBIT was expected to rise 29%, or at least 100 million euro more than the 342 million euro posted in the year-ago period. Car stocks recovered some of yesterday's losses, while financial stocks HVB and Commerzbank benefit from the latest mergers and acquisition activity within the sector. Pharma stocks were also higher as U.S. peer Pfizer outlines forecast for this year. The world's largest drug maker says earnings will fall to $8.6 billion. Lufthansa fell back despite lower oil and news its plane maintenance unit, LH Technik, won a contract worth 100 million euro from Gulf Air. The Financial Times said the global airline industry could lose $5.5 billion in 2005 because of continuing high crude oil prices. E.ON is expected to receive bids of about 1 billino euro for its Ruhrgas Industries unit from private equity funds by May 20.

In France, the CAC 40 gained 35.62 points, or 0.88%, to close at 4362.61. Wall Street was edging cautiously higher by Europe's close, as WTI trades below $57 per barrel and Dow heavyweight Pfizer rallied after it disclosed cost-cutting initiatives. Energy remains high on the agenda as Fed Chairman Alan Greenspan addresses a petrochemicals conference in San Antonio, Tex. Locally, Sanofi, and European pharmas, were boosted by read-across from Pfizer. In addition, Prudential initiated coverage of the French drug-maker with overweight. The news that Pernod Ricard is considering an offer for the UK's Allied Domecq, together with US Fortune Brands, was welcomed by the market and overshadowed Goldman Sachs' downgrade on the drinks group to in-line from outperform. Cap Gemini dipped after ABN Amro downgraded the stock to hold from add and cut the target to 28 euro from 30 euro to reflect a more conservative view on long-term margins.

Asian markets were higher on Tuesday. In Japan, the Nikkei 225 gained 106.77 points, or 0.92%, to close at 11,774.31. Japan's Nikkei average ended higher helped by a fall in oil prices overnight and a stronger dollar against the yen, which is seen as a plus for exporters. Canon Inc. added 1.4% while Honda surged 2.22%. NEC Corp climbed 1.25% on news of the expansion of its strategic alliance with Sun Microsystems in systems integration and other areas. All Nippon Air (ANA) rose after a Nihon Keizai report said ANA will likely log a larger profit in 2005/2006. But Fuji Photo slid after Merrill Lynch downgraded the stock to Neutral from Buy. Japan Petroleum Exploration ended flat following a Nihon Keizai report saying the company expects group operating profit in the current business year to sink about 20% to around 10 billion yen due to higher oil and natural gas exploration costs.

Hong Kong's Hang Seng was closed for holiday.

Canada's benchmark TSX/S&P gained 11.83 points, or 0.12%, to closee at 9,619.07.

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