Europe Stocks Edge Higher on Renewed Vaccine Optimism, M&A Boom

(Bloomberg) -- European equities ended slightly higher on Monday, as investor sentiment was boosted by buoyant M&A activity and signs of progress toward a Covid-19 vaccine.

The Stoxx Europe 600 Index ended the session up 0.2%, after testing its 200-day moving average and again failing to break out, with the technical indicator continuing to act as a ceiling. Monday’s gains were offset by a drop in energy shares, falling along with crude prices.

Traders showed caution at the start of a week full of potential catalysts, including anticipated rate decisions from the Federal Reserve and the Bank of England.

“This week may be dangerous for investors on equities as market volatility will be on the rise due to a busy agenda,” said Pierre Veyret, technical analyst at ActivTrades, pointing to many central banks announcing policy decisions ahead of a quadruple witching trading session on Friday. “This rising volatility is likely to increase trading opportunities if markets become more and more directional, but, on the other hand, it could be a trap for many investors if prices continue to trade sideways.”

Five Things You Need to Know About Stoxx 600’s Sector Changes

The biggest climber among Stoxx 600 members was U.K. security company G4S Plc, which jumped 25% after GardaWorld made an all-cash offer. Credit Suisse Group AG shares gained after a report about UBS Group AG’s chairman exploring a potential tie-up next year. Meanwhile, Euronext NV shares declined after Reuters reported that Swiss stock exchange operator Six was the highest bidder for Borsa Italiana.

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