European stocks rose on Monday, led by cyclical sectors sensitive to the economy, as sentiment was boosted by hopes for a faster recovery and multi-billion dollar deals in the region.
* The pan-European STOXX 600 index rose 0.3%, adding gains to a 3.5% rise in the prior week, in line with optimism in global markets that sent Wall Street and a global equity index to highs historical by the hopes of stimuli [MKTS/GLOB]
* Dialog Semiconductor rose 16% to its highest level in two decades after Japanese chipmaker Renesas Electronics Corp agreed to buy the Frankfurt-listed chip designer for 4.9 billion euros ($ 5.89 billion) in cash.
* Cyclical sectors, which include commodities, banks and chemicals, increased between 0.8% and 2.2%, and were among the highest gains in the main index. Tech stocks gained 1.5%.
* The global launch of COVID-19 vaccines and increased M&A activity have helped reduce recent pessimism around equities. The STOXX 600, however, has yet to reach pre-pandemic levels, and is at around 5% of the 2020 highs.
* “We are underweight European equities,” BlackRock strategists said in a note. “The market has a relatively high exposure to finance pressured by low rates.”
* Data from Germany showed industrial production stalled in December after lockdowns to contain the COVID-19 pandemic held back the manufacturing sector in Europe’s largest economy.
* The main Frankfurt index closed flat, retreating from session highs.
(1 dollar = 0.8315 euros)