European shares rebound on M&A news, strong miners

* FTSEurofirst 300 rises 0.9 pct after Friday’s 1-month low

* Miners up on inconclusive Australian election results

* M&A activities improves sentiment; Old Mutual up 4.3 pct

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Aug 23 (BestGrowthStock) – European shares bounced back from
one-month lows on Monday as more merger and acquisition news
improved sentiment and miners rose on hopes a planned mining tax
in Australia could be scrapped once a government is formed
there.

At 1042 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.9 percent at 1,038.53 points after
hitting a one-month closing low in the previous session on
concerns about global economic growth.

Miners featured among the top gainers as investors expected
that weekend elections in Australia, the world’s leading metals
producer, would deliver a new minority conservative government
that will scrap a planned mining tax. [ID:nSGE67M01G]

“The elections results that we have been seeing will suggest
that perhaps there could be some further movement in relation to
softening of that position,” said Henk Potts, equity strategist
at Barclays Wealth, referring to the proposed mining tax.

The STOXX Europe basic resources index (.SXPP: ) rose 1.7
percent, while BHP Billiton (BLT.L: ), Anglo American (AAL.L: ),
Antofagasta (ANTO.L: ) and Rio Tinto (RIO.L: ) were up 1.6 to 2.2
percent.

Equities got support from merger and acquisition (M&A) news,
with Foster Group (FGL.AX: ) jumping more than 7 percent after
sources said beverage giants SABMiller (SAB.L: ) and Asahi
Breweries (2502.T: ) were looking at Foster’s beer operations,
valued at more than $10 billion. [ID:nSGE67M030]

“M&A activities are certainly a key driver for markets.
Equity valuations, rehabilitating credit markets and an economic
recovery mean conditions are ripe for mergers and acquisitions.”

In another M&A news, HSBC (HSBA.L: ) will buy up to 70 percent
of South Africa’s Nedbank (NEDJ.J: ), in a potential $6.8 billion
deal that would give Europe’s largest lender a bigger presence
in Africa’s top economy and a gateway to the fast-growing
continent. [ID:nLDE67M05Q]

Old Mutual (OML.L: ), which has a controlling stake in
Nedbank, surged 4.3 percent.

“From a strategic point of view, we believe the deal would
be positive for HSBC, providing it with exposure to fast growing
economic region and allowing the enlarged Group to lever the
burgeoning Asia-Africa trade corridor,” said Danny Clarke, an
analyst at Shore Capital.

Global M&A offers worth about $200 billion were in the news
in August alone, Thomson Reuters data showed.

They included BHP Billiton’s (BLT.L: ) $39 billion hostile
offer for Potash Corporation of Saskatchewan Inc (POT.TO: ) and
RSA Insurance’s (RSA.L: ) 5 billion pound offer to buy rival
Aviva’s non-life units, which Aviva has rejected.
[ID:nLDE67J0HZ]

FINANCIALS ADVANCE

Financial stocks were among the top gainers, with STOXX
Europe 600 banking index (.SX7P: ) rising 1.5 percent. HSBC was up
0.8 percent, while Standard Chartered (STAN.L: ), Royal Bank of
Scotland (RBS.L: ) and Natixis (CNAT.PA: ) rose 1.2 to 3.3 percent.

The market also got some help from macroeconomic data.
Figures showed Germany’s services sector expanded at its fastest
rate in three years this month, pointing to a timely broadening
of the recovery in Europe’s largest economy. [ID:nSLAKJE6AJ]

But some analysts stayed cautious because of recent poor
macro numbers, especially from the United States.

“Macroeconomic figures are still likely to come in worse
than expected and could push down the market. On the other hand
we have some relief from M&A activities, but that is not going
to be able to offset the bad economic numbers,” said Koen de
Leus, economist at KBC Securities.

The Euro STOXX 50 (.STOXX50E: ), the euro zone’s blue-chip
index, rose 0.9 percent to 2,667.92 points. The index faced
strong resistance at around 2,670 — its 38.2 percent Fibonacci
retracement of a fall from a high in April to a low in May —
and further at around 2,698, its 50-day moving average.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: )
and France’s CAC 40 (.FCHI: ) up 0.5 to 1 percent.

“The market will continue to battle between dark clouds of
the macroeconomic environment and relatively positive corporate
position,” Potts of Barclays said.
(Additional reporting by Harpreet Bhal; Editing by Karen
Foster)

European shares rebound on M&A news, strong miners