European stocks close higher amid merger news; Sainsbury's soars 15%

Key Points
  • Germany, France and the U.K. have urged the U.S. to not apply metal tariffs to Europe.
  • Asda and Sainsbury's will merge in a roughly £15 billion ($20.67 billion) deal.
  • Seb, WPP and Old Mutual released fresh earnings.

European equities closed higher on Monday, the last trading day of the month, as investors digested merger news and focused on earnings.

The pan-European Stoxx 600 closed provisionally 0.12 percent higher with most sectors and major bourses in positive territory.

Media stocks were the top performers on Monday, with WPP leading the sectoral gains. The advertising giant presented higher-than-expected net sales in the first quarter of the year, despite the exit of its founder Martin Sorrell. The stock jumped 8.6 percent.

Retail stocks also climbed following news that Asda and Sainsbury's will merge in a roughly £15 billion ($20.67 billion) deal. Sainsbury's shares were up by more than 14.5 percent. Competitor supermarket Tesco traded almost 1 percent lower. The former is set to lose its place as the U.K.'s largest grocer if the merger is approved by regulators.

Looking at individual stocks, Seb shares fell more than 4 percent. This was after the Swedish bank announced a drop in its first-quarter net profit.

In Italy, Telecom Italia chief Amos Genish said that his position in the firm would be "untenable" if activist fund Elliott gets the majority of the board seats during a shareholder vote Friday, Reuters reported. Separately, T-Mobile and Sprint said Sunday they had agreed on a $26 billion merger deal.

On Wall Street, stocks opened higher, boosted by a wave of dealmaking news and earnings.

In geopolitical news, Kim Jong Un, the leader of North Korea, is set to invite U.S. experts and journalists to witness the shutdown of a nuclear site in May, Reuters reported.

Back in Europe, Germany, France and the U.K. have joined forces against potential new tariffs from the U.S. On Sunday, the three countries urged the U.S. administration to not apply metal tariffs to Europe. In March, President Donald Trump imposed a 25 percent duty on steel imports and a 10 percent duty on aluminum but Europe got a temporary exemption from the tariffs. Such an exemption is set to end on May 1.

In terms of data, German retail sales came in lower-than-expected on Monday morning. In March, sales fell 0.6 percent on the month in real terms, the Federal Statistics Office said. This was the fourth consecutive fall. Separately, German annual inflation slowed to 1.4 percent, down from 1.5 percent in the previous month, according to the government statistics body.