Europe Markets: Fiat surges and Peugeot plunges on plan to merge

Fiat Chrysler Automobiles shares surged while Peugeot plunged in otherwise listless European stock markets on Thursday. Fiat Chrysler

FCA, 7.85%

 jumped 9.6% while Peugeot

UG, -13.59%

  fell 12.1% as the two companies said they would come together in a 50-50 merger, with FCA shareholders also getting a special dividend of 5.5 billion euros and Peugeot distributing its 46% stake in car parts supplier Faurecia

EO, -2.73%

  to its shareholders. Faurecia shares fell 3.8%. “Adjusted for differences in market cap and distribution, we estimate PSA is paying a 32% premium to take control of FCA and its shareholders assume more market risk,” said analysts at Jefferies. Renault

RNO, -3.51%

 , which previously tried to merge with Fiat, fell 3.4%. After closing Wednesday at its second-highest level of the year, the Stoxx Europe 600

SXXP, -0.36%

 dropped 0.32% to 397.43. The German DAX

DAX, -0.25%

 dropped 0.46% to 12850.90, the French CAC 40

PX1, -0.41%

 dropped 0.39% to 5743.43 and the U.K. FTSE 100

UKX, -0.99%

 declined 0.61% to 7286.40. It was the first opportunity in Europe to react to news the U.S. Federal Reserve cut interest rates by a quarter-point, and that Chairman Jerome Powell said interest rates wouldn’t increase until inflation increased substantially. China doubts that a long-term trade deal can be reached with President Trump, according to a report from Bloomberg News, and this pressured stocks. Of movers in Europe, chip equipment maker ASM International

ASM, 5.83%

 surged nearly 8% as it reported stronger new order growth than it had guided for alongside a 37% increase in profit during the third quarter. Eutelsat Communications

ETL, -10.12%

 fell 11.9% as the satellite operator reported a worse-than-forecast 6% drop in comparable sales growth during the first quarter and the company’s CFO told investors there’s a higher likelihood fiscal year revenue will be at the lower end of its estimates. Air France-KLM

AF, -2.41%

 fell 4.7% as the airline reported a sharp drop in third-quarter profit, with its operating profit lagging analyst forecasts. The airline also said fourth-quarter unit revenue would fall.



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