Till receipts from Asda and Sainsbury’s can be seen in this photo illustration April 28, 2018. REUTERS/Toby Melville/Illustration
April 30, 2018
LONDON (Reuters) – A multi-billion pound merger between British supermarket Sainsbury’s and ASDA shook up retail stocks on Monday while European benchmarks rose, on track to end the month of April with a gain.
The pan-European STOXX <.STOXX> index rose 0.1 percent while Germany’s DAX <.GDAXI> gained 0.3 percent, buoyed by investors’ improved risk appetite as tensions between North and South Korea eased, and companies delivered strong earnings figures.
In Europe all eyes were on Sainsbury’s <SBRY.L>, whose shares shot up 20 percent at the open after the retailer agreed a 13.3 billion pound merger with Walmart’s ASDA.
Tesco <TSCO.L>, whose position as UK leader in terms of market share would be overtaken by the new merged group, tumbled 2.5 percent on the news, weighing retail stocks down.
Morrisons <MRW.L> and Marks & Spencer also fell 0.6 percent to 0.7 percent. France’s Carrefour <CARR.PA> however gained 0.4 percent, while Casino <CASP.PA> rose 0.9 percent.
In other deal news, Deutsche Telekom <DTEGn.DE> shares rose 1.5 percent to the top of the DAX after the German firm clinched a $26 billion deal to merge T-Mobile US and Sprint.
In results-driven moves, the world’s biggest advertising group WPP <WPP.L> surged up 9 percent after reporting forecast-beating sales in its first results without founder Martin Sorrell.
The agency’s gains boosted the pan-European media sector <.SXMP> up 1 percent. Financials stocks, the most sensitive to investors’ risk appetite, were the biggest driver of the STOXX.
(Reporting by Helen Reid; editing by Julien Ponthus)