Europe open: M&A news bolsters shares ahead of Q2 results season

Stocks in Europe have started the week higher with investors opting to take a 'glass half full' approach and with investor sentiment boosted further by gains during Asian trading and merger news on both sides of the Atlantic.

"Equity markets in Europe are showing decent gains this morning. Even though the pandemic is getting worse, stocks in Asia drove higher and the feel-good factor spilled over to this part of the world," said David Madden at CMC Markets UK.

Madden also highlighted the positive news out at the end of the previous week as regards Gilead Sciences's Covid-19 treatment Remdesivir and German biotechnology outfit BioNTech's vaccine candidate as reasons for investors' apparent cheer.

Against that backdrop, as of 1100 BST, the German Dax was up by 0.97% at 12,754.98 and bumping up against multi-month highs.

The Stoxx 600 meanwhile was ahead 0.59% to 369.90, with shares of Neles Oyj rocketing to the top of the leaderboard for the pan-European gauge.

Earlier, Swedish engineer Alfa Laval had tabled a $2.0bn bid for the Finnish valve maker.

To take note of, Stateside, chipmaker Analog Devices launched a nearly $21bn bid for rival Maxim Integrated.

Also in the Nordics, stock in DNB ASA, Norway's second-largest lender, was catapulted higher on the back of better-than-expected second quarter earnings.

Milan's FTSE Mibtel on the other hand was lagging behind, trading up by 0.26% to 19,818.05, even after ratings agency Fitch reaffirmed its rating and outlook for the country's long-term debt after the close of trading on Friday.

In the background, the focus was on the start of the second quarter US earnings season and whether companies' guidance would validate forecasts for a sharp recovery in profits in 2021 - despite the risk of tax hikes under a Biden administration.

For the Stoxx 600's components, second-quarter earnings were expected to plummet 59% from 2019 levels.

There was also much expectation ahead of the European Union leaders' summit scheduled for the end of the week, where the bloc's leaders would try to thrash out the terms of the proposed €750bn reconstruction fund.

On a positive note, French finance minister, Bruno Le Maire, said that Paris would unveil a "massive" programme to boost youth employment with a broader stimulus package - including corporate tax cuts - due to follow at the end of August.