* FTSEurofirst up around 1 pct
* Electrolux slumps as GE deal falls through
* Health care stocks outperform
By Sudip Kar-Gupta
LONDON, Dec 7 (Reuters) - European shares rose on Monday from the three-week lows they reached last week, although Electrolux slumped after its deal to buy General Electric’s appliance business fell through.
GE terminated the $3.3 billion agreement, which the U.S. Department of Justice had asked a federal court to stop in July, on concern it would push up prices for consumers.
Electrolux fell 12.5 percent, underperforming a 1.1 percent gain in the pan-European FTSEurofirst 300 index.
Overall, European stock markets were supported by a rise in healthcare stocks as investment bank Jefferies increased its price target for such stocks GlaxoSmithKline, Roche and Sanofi. Novartis advanced on positive trial results for a leukemia to treat drug.
France’s benchmark CAC-40 index advanced 1.1 percent, shrugging off victories in regional elections on Sunday for the country’s far-right National Front party.
European stocks fell last week after the European Central Bank announced its latest stimulus package, which disappointed investors who had expected more extensive measures.
However, markets benefited on Monday from a weaker euro . The currency fell against the dollar after U.S. jobs data on Friday increased the chances U.S. interest rates will rise this month. A weaker euro helps stocks by making European exports cheaper and competing imports more expensive.
JP Morgan Cazenove’s equity strategist Mislav Matejka also expects stocks to recover from last week’s ECB disappointment, pointing to signs of economic recovery in Europe and expectations investors would welcome a U.S. rate rise. But he said selling on rallies for a profit might be a good tactic in the future.
“The markets took the latest ECB easing negatively, demonstrating how elevated expectations have become. Still, we think that equities will regain their footing around the turn of the year, given favourable seasonals, stabilizing China, robust euro zone and U.S. activity, and the first Fed hike should be taken positively,” he said.
“Further out, we believe that the structural ‘overweight’ equity stance that we had for all these years is not appropriate any more. The phase of selling any rallies might be upon us.”
Today’s European research round-up (Editing by Larry King)