Europe stock markets climb despite Crimea referendum

A truck carrying cars speeds past the headquarters of Vodafone in Madrid. Vodafone was the most heavily traded stock on the London market yesterday, jumping 1.7% after it sealed a €7.2bn takeover of Spanish cable company Ono.

AFP/London

European and US stock markets shrugged off yesterday Crimea’s decision to join Russia, focusing instead on some positive corporate news, dealers said.

London’s benchmark FTSE 100 advanced 0.62% to 6,568.35 points, bolstered by news that British mobile phone giant Vodafone had sealed a €7.2bn takeover of Spanish cable company Ono.

In Paris the CAC 40 climbed 1.32% to 4,271.96 points, while the Dax 30 in Frankfurt gained 1.37% to 9,180.89 points.

“In a classic case of ‘sell the rumour, buy the fact’ European equity markets have enjoyed a rare positive session today after the weekend vote in Crimea went pretty much as everyone had expected it would with the region declaring its autonomy from Ukraine and requesting to join up with Russia,” said analyst Michael Hewson at CMC Markets UK.

Taking its lead from the European markets, Wall Street also advanced.

In midday trading, the Dow Jones Industrial Average jumped 1.05% to 16,234.18 points.

The broad-based S&P 500 increased 0.65% to 1,858.26, while the tech-rich Nasdaq Composite Index gained 0.99% to 4,287.23.

VarenGold Bank analyst Anita Paluch said the Crimean referendum had already been included in traders’ thinking.

“The result of the Crimean vote did not surprise anyone given the circumstances and the context and traders are waiting now to see what Europe and US is going to do about it,” she said.

With the unrest on Europe’s eastern borders largely factored in, investors focused on merger and acquisition activity, especially in the consolidating telecoms sector.

Vodafone was the most heavily traded stock on the London market, jumping 1.7% to 226 pence after it announced a major acquisition in the Spanish market that won widespread market approval.

Flush with cash from the sale of its Verizon Wireless stake to partner Verizon for $130bn, Vodafone will purchase Spain’s Ono for €7.2bn ($10bn) including debt, the British mobile giant announced in a statement.

London’s top gainer was house builder Persimmon, whose shares rallied 3.7% to 1,361 pence after Britain announced the extension of its ‘Help to Buy’ programme, which supports home buyers with government-backed loans.

In Paris meanwhile, French bank Societe Generale saw its share price rise 0.77% to €44.34 despite news of a major divestment.

The currency markets were also stable. The euro rose to $1.3923 from $1.3909 late on Friday in New York.

The US dollar rose to ¥101.65, from ¥101.33.

The gold price also dropped to $1,378.50 per ounce, from $1,385 on Friday, after having risen as high as $1,392.22 in Asian trading.