EUROPE MARKETS: European Stocks Jump To 10-week High As Banks Rally
By Sara Sjolin, MarketWatch
Alstom climbs after Siemens rail deal
European stocks advanced for a fifth straight session on Wednesday, with banks rising on expectations of higher U.S. interest rates and Alstom shares rallying after its rail merger with Siemens.
The Stoxx Europe Index added 0.4% to end at 385.62, marking its highest close since July 17, according to FactSet data.
Alstom-Siemens deal: Helping the pan-European benchmark move higher on Wednesday were shares of Alstom (ALO.FR) , which leapt 4.3%, and Siemens AG (SIE.XE)(SIE.XE) , which climbed by 1.2%.
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.