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European shares edge higher; Unilever rises

Published 09/27/2010, 07:49 AM
Updated 09/27/2010, 07:52 AM

* FTSEurofirst 300 index gains 0.1 percent

* Unilever gains after U.S. hair company buy

* Actelion slips on drug trial failure

* For up-to-the minute market news, click on

By Joanne Frearson

LONDON, Sept 27 (Reuters) - European shares gained on Monday, with Unilever lifting the food and beverage sector higher after the consumer goods giant said it is to acquire a U.S. hair care company for $3.7 billion. However, rises were limited as drugmakers fell. Europe's largest biotech Actelion slumped 7 percent after its haemorrahage drug clazosentan failed in a late-stage study, lessening the chances of it making it to market.

By 1113 GMT, the pan-European FTSEurofirst 300 index of top shares was 0.1 percent higher at 1,079 points after rising on Friday following better-than-feared U.S. macro economic data.

"We are marginally positive," Peter Dixon, economist at Commerzbank. "Merger and acquisition transactions is no better than at same time last year, I don't think we are about to see a huge wave."

Food and beverage stocks featured among the top performers, with the STOXX Europe 600 Food & Beverage Index up 0.85 percent. Unilever gained 2.4 percent after the consumer goods giant said it is to acquire United States-based hair care group Alberto Culver for $3.7 billion in cash. Meanwhile, a source said, China's Bright Food Group is exploring the purchase of Britain's United Biscuits, a deal that at roughly $3.2 billion would be the largest ever international purchase by a Chinese company in the food and beverage sector.

Elsewhere in the sector, Pernod Ricard rose 2.2 percent after French newsletter La Lettre de L'Expansion said the French drinks group had an excellent summer, with sales up 7 percent against 2008.

Traders said investors were cautious ahead of UK GDP figures on Tuesday and U.S. GDP numbers on Thursday.

"The market is now trading cautious ahead of the numbers. If these figures come out better or worse than expected then we could see a swing," Kishan Mandalia, trader at City Index, said.

ASTRAZENECA SLIPS

On the downside, AstraZeneca lost 0.9 percent after the company's experimental prostate cancer pill zibotentan failed to improve survival in a late-stage clinical trial, dealing a fresh blow to the its oncology pipeline.

But, the technical picture was positive, with the Euro STOXX 50, the euro zone's blue chip index, staying above its 200-day moving average of 2,776.06. The index was flat at 2,792.08.

Valuations on the STOXX Europe 600 looked cheap. Its one-year forward price-to-earnings stood at about 10.53 against a 10-year average of 13.57, Thomson Reuters Datastream showed.

Across Europe, the FTSE 100 index was flat, Germany's DAX was 0.1 percent higher and France's CAC 40 was 0.1 percent higher. (Reporting by Joanne Frearson)

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