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 FedEx Corp made a 4.4 billion-euro ($4.8 billion) bid to buy Dutch
package-delivery company TNT Express, sending TNT shares jumping
almost a third in value and lifting shares across the sector and
beyond.
The M&A feel-good factor for stocks dovetailed with generally low
government bond yields, as expectations of the first U.S. interest
rate increase since June 2006 continue to cool after last Friday's
relatively weak employment data.
The pan-European FTSEurofirst index of leading 300 shares was up 1
percent in early trade at 1602 points. Shares in TNT Express were up
31 percent, easily the biggest gainers in Europe.
Germany's DAX, France's CAC 40 and Britain's FTSE 100
were also up 1 percent. Spain's IBEX reached its highest level since
January 2010.
"Mergers and accusation news is back today in full throttle after
FedEx announced their desire to take over TNT Express," said Naeem
Islam, chief market analyst at Avatrade.
"The Fed is still data-dependent and any weakness in the economic
data is equal to the presence of cheap money. We now have a question
mark on a summer rate hike," he said.
U.S. stock futures were pointing to a slightly higher open on Wall
Street.
MSCI's broadest index of Asia-Pacific shares outside Japan gained
0.3 percent, Japan's Nikkei rose 1.2 percent and Chinese
stocks climbed more than 2 percent to a seven-year high as the
quarterly earnings season approached.
RBA ON HOLD, AUSSIE DOLLAR JUMPS
In currencies, the biggest mover was the Australian dollar, which
rallied more than 1 percent after the country's central bank
surprised some by leaving interest rates at a record low 2.25
percent. [ID:nRBA]
The Aussie was up 1.1 percent at $0.7676 <AUD=D4>, pulling away from
the six-year low of $0.7534 plumbed last week.
But given the risks facing the Australian economy, such as sliding
prices for iron ore, the country's biggest export, the central bank
did leave the door open for future action, saying further easing
might be appropriate.
The euro was flat at $1.0922, after earlier trading as high as
$1.1036 overnight. The dollar was 0.2 percent stronger at 119.80
yen, up a full yen from Monday's low.
The dollar was struggling, however, to regain all its losses in the
wake of last Friday's U.S. jobs report, which showed sub-par job
creation in March and downward revisions to the pace of hiring in
the previous two months.
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The 10-year Treasury yield recovered from two-month lows struck
overnight, and was back at a level prior to the jobs data release at
around 1.90 percent.
Comparable German yields were also little changed from the previous
trading session at around 0.18 percent. Greek and other peripheral
euro zone yields were all as much as 5 basis points lower.
Greek finance minister Yanis Varoufakis said on Sunday that Greece
"intends to meet all obligations to all its creditors, ad
infinitum," seeking to quell fears of a default before a big loan
payment Athens owes the International Monetary Fund later this week.
"Varoufakis pledged to meet this week's upcoming 440 million-euro
IMF payment on Thursday, easing earlier concerns that the government
was to prioritize wages and pension payments over the repayment,"
said Deutsche Bank strategist John Reid.
In commodities, crude oil dipped, giving back some of the gains made
overnight as the market reassessed how quickly Iran might increase
exports after a preliminary nuclear deal. Goldman Sachs said prices
needed to remain low for months to achieve a slowdown in U.S. output
growth.
U.S. crude was down 1.4 percent at $51.40 a barrel after rallying 6
percent on Monday. Brent also shed 1.4 percent to $57.31 a barrel
following its 5.7 percent jump.
Gold retreated as the dollar rebounded. It was last down to
$1,211.40 an ounce after hitting a seven-week peak of $1,1224.10 on
Monday.
(Reporting by Jamie McGeever; Editing by Larry King; To read Reuters
Global Investing Blog click on http://blogs.reuters.com/globalinvesting;
for the MacroScope Blog click on http://blogs.reuters.com/macroscope;
for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)
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