EUROPE MARKETS: European Stocks Jump To 10-week High, Led By Alstom After Siemens Deal
By Sara Sjolin, MarketWatch
European stocks moved higher on Wednesday, led by gains for Alstom SA and Siemens AG after the two agreed to merge their rail operations.
A weaker euro also helped boost the region's stock indexes, breaking out of days of rangebound trading.
The Stoxx Europe Index added 0.5% to 384.97, setting it on track for its fifth straight advance. If it closes at this level, it'll mark the highest finish since July 19, according to FactSet data.
Alstom-Siemens deal: Helping the pan-European benchmark move higher on Wednesday were shares of Alstom (ALO.FR) , which leapt 4.8%, and Siemens AG (SIE.XE)(SIE.XE) , which climbed by 1.8%.
The companies agreed to merge their rail operations (http://www.marketwatch.com/story/alstom-siemens-to-merge-creating-rail-giant-2017-09-26), aiming to create a European giant with the scale to fight growing competitive threats from state-backed Chinese rivals.
"Siemens-Alstom targets annual synergies of EUR470 million after four years, which looks overly ambitious, in our view," analysts at Deutsche Bank said in a note.
"Unlike car making, economies of scale are not significant in train production and many smaller tier-2 suppliers have actually proven very successful at winning tenders," they added.