European stocks were little changed, with the Stoxx Europe 600 Index heading for its first monthly gain since May, as drugmakers rallied, offsetting a plunge in Tesco Plc shares.
AstraZeneca Plc climbed 2.2 percent, leading a gain by health-care companies, after a report that Pfizer Inc. may have resumed takeover talks. Tesco Plc dropped 5.3 percent after lowering its full-year profit forecast and its interim dividend.
The Stoxx 600 gained 0.1 percent to 341.36 at 11:03 a.m. in London after earlier rising as much as 0.5 percent. The benchmark dropped 0.7 percent yesterday as evidence mounted that Russian troops have made an incursion into eastern Ukraine. Futures on the Standard & Poor’s 500 Index added 0.2 percent today, while the MSCI Asia Pacific Index retreated 0.2 percent.
“Markets are still holding up pretty well given the severe escalation in geopolitical tensions over the past 24 hours,” said Guy Foster, the London-based head of research at Brewin Dolphin Securities Ltd., which manages more than 28 billion pounds ($46 billion). “The health-care sector is being led by AstraZeneca bid rumors. The other main sector of interest is food retailers, where Tesco’s surprise announcement has been taken as a sign that competition in the sector is about to intensify, at shareholders’ expense.”
The Stoxx 600 has climbed 1.4 percent this week after European Central Bank President Mario Draghi signaled policy makers are ready to start a bond-buying program. It has advanced 1.6 percent in August after posting losses in July and June.
AstraZeneca gained 2.2 percent to 4,578 pence. Swedish newspaper Dagens Industri said Pfizer may have restarted bid talks with the London-listed drugmaker, without revealing where it got the information. The American company abandoned a $117 billion bid to buy AstraZeneca in May. U.K. takeover rules prevented it from resuming talks until Aug. 26.
Tesco slid 5.3 percent to 233.3 pence after the U.K.’s biggest retailer lowered its full-year profit forecast to a range of 2.4 billion pounds to 2.5 billion pounds, and cut its interim dividend by 75 percent to 1.16 pence per share. It expects first-half trading profit to reach 1.1 billion pounds. Dave Lewis will take over as chief executive officer from Sept. 1, instead of Oct. 1 as previously announced.
A gauge of British food and drug retailers fell 4.5 percent. J Sainsbury Plc and Wm Morrison Supermarkets Plc, the U.K.’s third- and fourth-largest supermarket chains, dropped 3 percent to 294.5 pence and 4.2 percent to 179 pence, respectively.
D’Ieteren SA lost 0.9 percent to 32.21 euros after posting first-half pretax profit excluding one-off items of 86.7 million euros ($114 million). That missed the average analyst estimate of 95.9 million euros. The owner of the world’ largest vehicle-glass repair company repeated its full-year forecast that profit before taxes and special items will drop 10 percent.
A Eurostat report showed that inflation in the 18-nation euro zone fell to 0.3 percent this month, matching the projection of economists surveyed by Bloomberg. The threat of deflation may prompt the ECB to start buying assets in an attempt to return inflation to the bank’s target.