Europe Stocks Steady on Italy Budget News; Glaxo Jumps on Merger

(Bloomberg) -- European equities were little changed and Italian shares rose after Italy was said to be closer to a final deal with Brussels over its budget.

The Stoxx Europe 600 Index added as much as 0.3 percent before trading steady. Healthcare stocks led the gainers, as GlaxoSmithKline Plc surged 5.2 percent after the company agreed to combine consumer health-care businesses with Pfizer Inc. Ceconomy AG tumbled 11 percent after scrapping its dividend.

Italian news added to market optimism after Italy and the European Union reached a technical agreement on the budget, according to a Treasury official who asked not to be named. Traders will also be watching the U.S. Federal Reserve’s decision today as an interest-rate increase is widely expected.

“For Europe, Italy is certainly the big news and I think we will see spreads there contract meaningfully,” said Benjamin Jones, a senior multi-asset strategist at State Street Global Markets in London. “It will be a fairly quiet day as all eyes will be on the Fed tonight. The Fed has a tough job in messaging what is likely to be a dovish hike without stoking growth fears."

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Jon Menon

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