On Thursday, Europe’s benchmark index reached a record high, driven by a surge in industrial stocks, while Spanish bank BBVA saw its shares hit a two-month low following the announcement of a hostile takeover bid for smaller rival Sabadell.
The pan-European STOXX 600 closed 0.2% higher, overcoming earlier losses, with Germany’s DAX rising nearly 1%.
Industrial giants like Siemens, ABB, and Schneider Electric each gained over 1%, providing significant boosts to the benchmark index.
May began positively for Europe’s STOXX 600 after a brief pause in April’s record-breaking rally.
This was fueled by robust earnings, signals from the European Central Bank suggesting a potential rate cut in June, and reduced tensions in the Middle East.
“The idea of the ECB moving to cut interest rates soon in June and potentially start a rate-cutting cycle has been the biggest driver,” noted Fiona Cincotta, senior market analyst at City Index.
In major M&A news, Spanish bank Sabadell surged 3.1% after rival BBVA presented a 12.23 billion euro takeover bid directly to shareholders, despite Sabadell’s board already rejecting the proposal. BBVA shares, however, fell by 6.7%, causing Spain’s benchmark index to lag behind its regional counterparts.
“It is quite rare to see this type of hostile takeover bid in Europe, and it has caught the market a little bit by surprise,” added Cincotta.
Automobile stocks declined for the second consecutive day by 0.8%, with Mercedes-Benz down 5.8% as the German automaker’s stock traded ex-dividend.
Top executives at BMW and Volkswagen cautioned against EU import duties on electric vehicles from Chinese automakers, warning it could disrupt the bloc’s Green Deal plan and impact EU-bound Chinese car-importing automakers negatively.
Other key stocks that traded ex-dividend and weighed on the STOXX 600 included HSBC and German financial services firm Allianz SE, down 1.8% and 3.7%, respectively.
In earnings news, Belgian drug developer Argenx saw a 5% decline following its first-quarter earnings report.
Italian payments group Nexi surged nearly 6.4% after reporting a larger-than-expected rise in first-quarter core profit.
BE Semiconductor Industries rose by 3.6% after announcing it received orders for 26 hybrid bonding systems.
BFF Bank’s shares plummeted 10.3% before being halted, following the Italian lender’s announcement that it had been instructed by the Bank of Italy to suspend dividend and bonus payments due to concerns about the classification of credits towards the state.
