Stoxx 600 FTSE, DAX, France gov collapse
LONDON — European stocks edged higher on Tuesday, buoyed by the surge in the share price of mining giant Anglo American following its merger announcement with Canada’s Teck Resources.
The pan-European Stoxx 600 index was up 0.1% at 11:34 a.m. in London, with France’s CAC 40 index gaining 0.4%. Investors were also monitoring political developments in France after Prime Minister Francois Bayrou was ousted on Monday.
‘Merger of equals’
Shares of Anglo American jumped 9.6% after the merger agreement with Teck Resources to create one of the world’s top five copper producers was announced.
Teck Resources shares in Frankfurt were trading 12.5% higher.
The new company, to be named Anglo Teck, will be based in Canada and listed on exchanges in New York, Toronto, London, and Johannesburg.
Under the terms of the deal, Anglo American shareholders will own 62.4% of the combined entity, with Teck shareholders holding the remaining 37.6%.
“Anglo American and Teck believe that the formation of Anglo Teck in a merger of equals will provide exceptional benefits for Canada, including establishing a global critical minerals champion headquartered in Canada,” the companies said in a joint statement.
Traders will be closely watching France this week following the political developments. Macron will need to appoint a new prime minister after Bayrou’s government lost a confidence vote.
Markets in Asia-Pacific traded mostly higher, while U.S. stock futures were stable after the Nasdaq Composite reached a new record on Monday.
Investors in the U.S. are awaiting inflation reports this week, with the producer price index for August scheduled for Wednesday and the consumer price index for Thursday.
Following weaker-than-expected job data, there is speculation that the Federal Reserve may consider lowering interest rates at its upcoming policy meeting.
