(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details) Adds closing prices)
* FTSEurofirst 300 index gains 0.8 percent
* H&M advances after encouraging update
* Healthcare top sectoral gainer led by Shire
By Atul Prakash and Danilo Masoni
LONDON/MILAN, April 6 (Reuters) - European shares rose on Wednesday after steep declines in the previous session, with the retail sector boosted by a smaller-than-expected fall in profits at Hennes & Mauritz.
Shares in the world’s second biggest clothes retailer rose 5.4 percent after it said the impact of U.S. dollar strength had started to wane and should turn neutral or slightly positive by the fourth quarter.
The healthcare index was the top sectoral gainer, up 2.4 percent, after U.S. drug maker Pfizer pulled out of a $160 billion deal to buy Allergan, in a victory for U.S. President Barack Obama’s drive to stop tax-dodging corporate mergers.
Shire, which plans to buy Baxalta in a $32 billion cash and stock deal that will make it one of the world’s leading rare disease specialists, ended up 5.2 percent.
Brenda Kelly, head analyst at London Capital Group, said Shire was now viewed as a target, while some other analysts said the Shire-Baxalta deal was unlikely to be affected by the proposed U.S. rules on tax-avoiding corporate “inversions”, which lower companies’ tax bills by redomiciling overseas.
“With Shire being an Irish tax domiciled company, we are not clear to what extent these rules may be important. But we do not see (the tax issue) ... as likely to derail management’s strong desire to complete the transaction,” Credit Suisse analysts said in a note.
The pan-European FTSEurofirst 300 index rose up 0.8 percent, helped late in the session by gains on Wall Street and after falling 1.9 percent in the previous session.
Shares in Fortum and Swedbank fell 12 percent and 5.8 percent respectively after going ex-dividend.
Today’s European research round-up
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Editing by Ruth Pitchford