Key facts
- European shares rose, led by the banking sector.
- Intesa Sanpaolo launched a $35 billion bid for Monte dei Paschi di Siena.
- GSK agreed to acquire Nuvalent for $10.6 billion.
- Investors monitored de-escalating tensions in the Middle East.
- German industrial production and exports increased in April.
European shares edged higher on Tuesday, with banking stocks leading the gains as investors assessed de-escalating tensions in the Middle East and anticipated a European Central Bank interest rate hike. The pan-European STOXX 600 index rose 0.5% to 624.78 points, with the EURO STOXX Banks index up 1.8%.
Intesa Sanpaolo's unsolicited €30.6 billion ($35 billion) bid for Monte dei Paschi di Siena (MPS) was a key driver for the financial sector. To address competition concerns, Intesa also agreed to sell 635 MPS branches and the brand to insurer Unipol for up to €3.5 billion. MPS shares gained 2.5%, while BPM and Intesa added 2.8% each. BPER Banca and Unipol rose 4.2% and 5.9%, respectively.
Investors also monitored developments in the Middle East, where Iran and Israel had halted attacks on each other, though diplomatic talks have yet to secure lasting peace. Concerns about inflation have led markets to price in a 25-basis-point interest rate hike by the European Central Bank on Thursday.
European tech stocks, which experienced volatility late last week, showed signs of steadying, rising 0.9%. Healthcare stocks declined the most, down 0.4%, with GSK losing 3.2% after agreeing to acquire Nuvalent for $10.6 billion to expand its lung cancer portfolio. UBS shares rose 2% amid reports of potential softening of capital requirements.
In economic news, German industrial production rose more than expected in April, and exports unexpectedly increased.