Yahoo Finance What to Watch: Brexit transition talks, European stocks, Novartis takeover, Italy's budget
Here’s a daily overview of some key economic and business developments that the Yahoo Finance UK team is monitoring in Europe and abroad:
Brexit transition in the spotlight
British Prime Minister Theresa May signalled on Thursday she would consider extending a transition period “for a matter of months” after Britain leaves the European Union, a move her critics say is a betrayal of Brexit.
The pound recovered on Thursday after May’s comments to trade around $1.31.
May has sought to reboot Brexit talks with her European Union counterparts on Wednesday after talks broke down over the weekend.
European markets up, but Chinese stocks get clobbered
All the main European stock markets posted modest gains in early morning trading on Thursday, a stark contrast to losses in Asia. The Shanghai Composite was the worst performer by far on Thursday, hitting its lowest level in four years after falling by nearly 3%.
One of the best performing stocks in Europe was Publicis Groupe (PUB.PA) in Paris. Shares surged by about 6% in morning trading after the company reported well-received third-quarter earnings.
Novartis: Big takeover announcement
Shares in Novartis (NVS) rose on the Swiss stock exchange and are set to pop in New York after it announced plans to acquire US-based drugmaker Endocyte (ECYT) for $2.1 billion in cash.
The purchase will help the Swiss drugmaker expedite its development of cancer treatments, the company said in a statement.
The $24-per-share offer represents a premium of 54% to Endocyte’s Wednesday closing price.
The transaction is expected to be completed in the first half of 2019.
Novartis also reported third-quarter results on Thursday.
Italian budget in focus
European Economic Commissioner Pierre Moscovici and Italy’s Economy Minister Giovanni Tria are holding a joint news conference at Italy’s Treasury on Thursday afternoon, only days after Italy’s cabinet approved an expansionary budget.
Analysts have voiced concerns about a clash between the EU and Rome over Italy’s fiscal plans, which are not clearly aligned with EU guidelines.
“There’s a lot of concern that things could get nasty,” Mujtaba Rahman, a managing director at Eurasia Group, told Yahoo Finance UK. The news conference is “designed to reassure markets… that there’s a discussion taking place and that discussion is constructive”.
Yields on 10-year Italian government bonds were rising above 3.5% on Thursday morning.
With files from Reuters
