March 9, 2014
European shares snap 4-day slide after stake sale
European stocks snapped their longest losing streak in six months today, boosted by Swiss food firm Nestle as it sold its Givaudan stake, potentially freeing up more than a billion dollars for buybacks or acquisitions.
Traders expected indexes to stay within a tight range and volume to be subdued until U.S. jobs data is published at 1330 GMT. This was expected to shed light on the state of the world's largest economy and, indirectly, on when the Federal Reserve's equity-friendly stimulus programme may be dialled back.
Nestle rose 1.5 percent, making it the single biggest contributor to the FTSEurofirst 300's rise, as it offloaded its 10 percent shares in fragrance and flavour maker Givaudan, worth 1.145 billion Swiss francs ($1.27 billion), fuelling bets it may use the money for share buybacks or bolt-on acquisitions.
"They don't need it and (shares) had a great rally so they might as well... make a better use of the capital, whether it's buying another business or buying back shares," Nick Xanders, head of strategy at BTIG, said.
L'Oreal, in which Nestle owns a 29.5 percent stake, rose 3.1 percent.
The two stocks added nearly a point to the FTSEurofirst 300 index, which was up 4.26 points, or 0.3 percent at 1,265.56 points at 0848 GMT. This put the index on track to end a four-day slide, longest reversal since June.