European stocks close higher; Ubisoft up 9% on restructured Microsoft-Activision bid

Microsoft has submitted a new takeover proposal for Activision Blizzard to the U.K. Competition and Markets Authority. Under the revised deal, Microsoft will transfer the cloud streaming rights for all current and new Activision PC and console games released over the next 15 years to Ubisoft.

Shares of European sportswear companies fell after U.S.-listed Dick's Sporting Goods cut its annual profit forecast.

JD Sports fell more than 6%, while Puma dropped 0.9%.

U.S. stocks that fell on the news include Lululemon, Nike and Under Armour.

— Hannah Ward-Glenton

British manufacturing output dropped by the most since September 2020 in the three months to August, according to a survey from the Confederation of British Industry.

Its gauge measuring output fell to -19 from +3, with the car industry and mechanical engineering among the worst performers.

Meanwhile, total orders were "below normal" levels in August.

"With output volumes contracting at their fastest pace since the Covid-19 pandemic and order books deteriorating, this survey makes for gloomy reading," said CBI economist Martin Sartorius.

"However, easing price pressures will bring some relief to many manufacturing firms and the broader economy."

— Jenni Reid

Timothy Ash, senior EM sovereign strategist at Bluebay Asset Management, discusses China tensions and says the two countries "don't want to isolate and irritate the West around BRICS."

Mark Haefele, chief investment officer at UBS Global Wealth Management, discusses the outlook for the U.S. economy.

European stock markets opened higher before extending gains in early trade, with the Stoxx 600 index up 0.9% at 9:07 a.m. BST.

All sectors posted gains and tech stocks were 2% higher, following upbeat sessions in the U.S. and Asia-Pacific markets.

— Jenni Reid

French gaming firm Ubisoft Entertainment was 6.6% higher at 8:32 a.m. BST, after Microsoft unexpectedly submitted to U.K. regulators a new deal for the takeover of Activision Blizzard.

Under the restructured deal, Microsoft will not acquire cloud rights for existing Activision PC and console games, or for new games released by Activision over the next 15 years. The rights will instead be divested to Ubisoft prior to any acquisition.

Microsoft's initial bid to buy the Call of Duty gaming juggernaut was rejected by U.K. authorities. A decision on the new deal is due Oct. 18.

Read the full story here.

— Jenni Reid, Arjun Kharpal

Meg O'Neill, CEO of Woodside Energy, discusses Australian unions' plan to strike at gas platforms, and says the company is optimistic about being able to avoid any significant industrial action, adding "but again, at the end of the day that'll be the unions' call if they want to use some of those levers that are available to them."

European stock markets are set to open higher Tuesday, according to IG data.

The FTSE 100 is seen 19.5 points higher at 7,278, Germany's DAX 86.6 points higher at 15,683, and France's CAC 40 39 points higher at 7,236.

Shares of SoftBank Group climbed as much as 3.36% on Tuesday after news that its chip unit Arm filed for a Nasdaq listing.

Arm did not disclose a share price and therefore has no valuation yet for the listing, but Reuters said that it is expected to be "the largest of the year."

Shares of SoftBank pared gains later in the session and are currently up 2.16%.

— Lim Hui Jie

U.S. Treasury yields advanced on Monday as investors remain concerned that interest rates could remain higher for longer than expected. The yield on the 10-year Treasury was up by more than 9 basis points at 4.34%, trading near levels last seen in 2007.

— Pia Singh

UBS has identified the stocks at risk of dragging one of Europe's largest equities indexes lower by 10% by the end of this year.

The Swiss investment bank said top performers in 2023, such as chip stocks and luxury goods makers, are at risk of big declines by the end of the year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Federal Reserve Chair Jerome Powell may not focus on what's best for him in his remarks from Jackson Hole, Wyoming, later this week, according to Mohamed El-Erian, Allianz chief economic advisor.

"What's likely is that he's probably going to talk about short-term monetary policy issues," El-Erian said on CNBC's "Squawk on the Street." "I don't think that's the best thing to do, because it is a very delicate situation right now."

Still, El-Erian said the central bank leader could be helped given the "target-rich environment," adding that there's "a lot" he can talk about.

— Alex Harring