European Stocks Close Higher Ahead of Rate Decisions; Asia Mixed
European stock markets closed slightly higher Wednesday, following a lackluster session in Asia.
London's FTSE-100 , the Frankfurt DAX and the Paris CAC-40 all rose, but volume was light throughout the trading day.
Investors had two big reasons to stay on the sidelines, with U.S. markets shut for a holiday and interest-rate decisions from the European Central Bank and the Bank of England arriving Thursday.
But while the U.S. stock and bond markets were closed for Independence Day, U.S. private equity firms decided to provide some fireworks for investors.
Instead of taking a vacation, Blackstone Group decided to snap up the preferred destination of many travelers, buying Hilton Hotels for $20 billion in cash, or $26 billion including debt. Blackstone will pay $47.50 a share for the hotel operator, a 32% premium above Tuesday's closing price.
It's the first major deal for Blackstone as a public company and it's clear the idea of tapping public capital appeals to the private-equity arena, with Kohlberg Kravis Roberts, known as KKR, filing to raise up to $1.25 billion with an initial public offering.
Not to miss out on the private-equity surge, Apollo Managementtrumped an accepted bid for Huntsman from its Dutch rival Basell by offing $6 billion for the U.S. chemical company.
In European corporate news, French caterer Sodexho Alliance closed 1.2% higher after reporting a 2.6% rise in nine-month sales, with comparable sales for the same period up 7.8%. Sodexho also affirmed its guidance for full-year sales growth of 7% and comparable sales growth of 12%.
Deutsche Telekom shares gained 0.7% after the Rheinische Post reported that its T-Mobile wireless division won the exclusive rights to distribute Apple's hot-selling iPhone in Germany.
But Deutsche Telekom told CNBC Europe Wednesday there is no decision on the exclusive rights of the iPhone and that negotiations are ongoing.
And Spain's energy regulator approved the $58 billion takeover of Spanish utility Endesa by Spanish construction company Acciona and Italian utility Enel, according to Spanish newspapers. Acciona gained 1.3%, while Enel slipped slightly.
European hotel companies soared following the Hilton purchase, with Britain's InterContinental gaining 3.9%.
On the economic front, euro zone retail sales unexpectedly dropped 0.5% in May, confounding economists' expectations for them to remain flat. And the purchasing manager's index for U.K. services rose to 57.7 in June, up from 57.2 in May.
Asian Markets Mixed
Asian markets failed to gain much traction, although Japan and South Korea made gains. Korean stocks finished at a record high, but the prospect of tighter credit weakened Chinese shares.
Tokyo's Nikkei 225 Average inched to its fifth straight gain as Mitsumi Electric and other technology stocks followed gains by similar U.S. firms. Gains were limited by slow trade, though, as volume on the first exchange hit a new low for the year. Market participants said investors were likely holding back due to concern about the outcome of an upper house election later this month.
South Korea's Kospi Index rose to a record close as Hynix Semiconductor surged on a report predicting a gain in DRAM contract prices, while lenders such as Woori rallied after
ratings agency Moody's said it may upgrade their debt ratings.
Australia's S&P/ASX 200 Index finished barely changed, well capped by profit taking in recent gainers such as Woolworths, though BHP Billiton rose after it approved the development of a major oil project.
Hong Kong stocks finished little changed. Bourse operator Hong Kong Exchanges and Clearing eclipsed its previous high on surging turnover, while energy stocks chased advancing crude prices. The debut by China High Speed Transmission Equipment, the country's largest wind-power transmission equipment maker, blew away expectations by more than doubling as the morning's most traded stock.
Chinese shares ended down 2%, pulled down by financials on thin turnover as the prospects of credit tightening and an increased supply of new shares to the market kept investors cautious. Singapore shares were also trading lower.