European stocks climbed on Tuesday, getting a boost from the U.S. and China holding trade talks.
After a 378-point gain for the Dow Jones Industrial Average
on Monday on news the U.S. gave tentative approval to blood plasma as a COVID-19 treatment, futures on the Dow
rose 125 points.
China reported that there was a “constructive” trade discussion that included Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer, and Treasury Secretary Steven Mnuchin. The U.S. said both sides “see progress and are committed to taking the steps necessary to ensure the success of the agreement.” Previously scheduled talks between the sides had been delayed.
That tone contrasts with the election campaigning of U.S. President Donald Trump, who said on Sunday in an interview he would be open to completely decoupling from China.
On the economics front, the Ifo business climate index for Germany rose in August, its fourth rise in a row.
Of stocks in the spotlight, Aveva
rose nearly 4% after it said it is buying OSIsoft for $5 billion, in a mostly cash deal, to expand its position in industrial software.
Aveva is buying the company that is 53% held by its founder and 45% held by SoftBank
and will fund the deal with a $3.5 billion sale of discounted shares, or rights issue. Aveva’s 60% shareholder Schneider Electric
supports the deal and will fully take up its share of the rights issue.
Michael Briest, a UBS analyst, said there had been speculation a deal would cost more than $5 billion, so the fact the price was below that level, as well as OSISoft’s margins are above Aveva’s, should lift the acquirer.