European shares were flat to slightly higher on Tuesday as economic data, which fell short of expectations was offset by M&A talk from Bayer (DE:BAYGN) and Monsanto (NYSE:MON).
Data showed German factory orders rose 0.2% in July, less than the 0.5% rise expected, leaving an annual decline of 0.7%.
Gains amongst homebuilder shares led by Berkeley Group after well-received earnings were more than offset by a decline amongst financial shares, leaving the FTSE 100 slightly lower. Standard Chartered (LON:STAN) was the biggest faller on the main benchmark.
Bayer has said it is willing to up its bid for US seed giant Monsanto to $56bn or $127.5bn per share in what it has described as advanced talks over the merger. There is clearly dialogue taking place, but it’s unclear if this new offer will be acceptable. Monsanto shareholders will be aware that the multiple paid for rival Syngenta by ChemChina was a lot higher, equivalent to around $139 per share.
Shares of Berkeley Group rose 3% after the homebuilder reiterated its guidance of £2bn pre-tax profit over the next three years. It’s a last hurrah for Berkeley on the FTSE 100 before it is demoted in the quarterly reshuffle. The company did, however raise its concerns over government housing policy in the capital, suggesting that higher taxes and conflicting local and national policies are affecting supply. With the highest exposure to London amongst top homebuilders, Berkeley shares have taken the most punishment. This is because the capital’s housing market, with stricter rules on second homes and foreign buyers could suffer the most from Britain’s exit from the European Union.
Taking their lead from a flat European close, US stocks look set for a slightly higher open on Tuesday after the Labour Day holiday and ahead of key service sector data.
Shares of Apple (NASDAQ:AAPL) will be in focus ahead of its product launch on Wednesday in the context of rival Samsung’s massive recall of its Galaxy Note smartphones.
USA pre-opening levels
S&P 500: 3 points higher at 2,182
Dow Jones: 23 points higher at 18,514
Nasdaq 100: 2 points higher at 4,800
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