Stocks choppy; Bayer slides on $62B Monsanto bid – CNBC

This post was originally published on this site

European stocks seesawed on Monday as investors digested a mixture of a fall in oil prices, positive data out of France and Germany and the prospect of a U.S. rate hike in June.

The pan-European STOXX 600 was down 0.44 percent.

Markit’s flash composite Purchasing Managers’ Index (PMI) for Germany in May rose to 54.7 from 53.6 in April. And France’s May composite PMI hit a seven-month higher of 51.1. The euro zone’s flash composite PMI in May however was 52.9, hitting a 16-month low and below April’s reading of 53.0.

Oil prices also slipped in Asian trade on Monday, hit by a strong dollar and signs that global crude supply is holding up despite unplanned outages, Reuters reported. In a further sign of abundant supply, the number of rigs operated by U.S. drillers was steady last week for the first time this year, the news agency noted. But the price of both Brent and West Texas Intermediate crude came off their session lows, helping to support markets.

The major news on Monday was German chemicals group Bayer who offered to acquire Monsanto for $122 per share in cash, valuing the U.S. firm at $62 billion. Shares of Bayer fell over 3 percent.

In Asia on Monday, markets traded mixed. Japan’s Nikkei 225 was down 1.18 percent, while the dollar-yen pair retreated to the 109 handle by mid-morning trade following data that showed Japanese exports were down 10.1 percent on-year in April.

The Bank of Japan’s Governor Haruhiko Kuroda told CNBC this weekend that he had “enough ammunition” to hit the central bank’s 2 percent inflation target amid some criticism the central bank’s negative interest rates policy had failed to deliver.

Basic resource stocks were down amid a weakening of metal prices thanks to a stronger dollar. The greenback has strengthened recently amid talk that a U.S. interest rate rise could now be coming in June, earlier than investors had previously expected. Anglo American were down 4 percent, while Arcelormittal and BHP Billiton were also lower.

Elsewhere, budget airline Ryanair was higher after the company announced a 43 percent rise in net profit in the 12 months to the end of March and announced it will cut fares in its next fiscal year.

Sports Direct sat near the bottom of the STOXX 600 after Goldman Sachs downgraded the stock from “buy” to “neutral”.

And in the auto space, Fiat Chrysler was sharply lower after Bild am Sonntag reported the German authorities have accused the carmaker of using software to cheat on emissions tests. A Fiat Chrysler spokesperson declined to comment on the report, according to Reuters. The whole auto sector was in the red. JPMorgan cut its price target for Volkswagen’s stock.

In other news, Turkey’s new prime minister has said that the European Union (EU) needs to end its confusion over migration policies and its attitude towards Turkey joining the bloc. The remarks, by new Prime Minister Binali Yildirim who is seen as a close ally of President Erdogan, come amid division in the U.K. over Turkey’s potential future membership of the EU.

Elsewhere in the U.K., the Treasury will warn on Monday that Britain will be plunged into a year-long recession if it votes to leave the EU, the Financial Times reported.

Follow CNBC International on Twitter and Facebook.