* FTSEurofirst 300 rises 0.4 pct
* Alstom, BHP Billiton up on spin-off hopes
* Metso surges as Weir considers bid
* Stimulus chatter in China, U.S. lends support
(Adds quotes, details, updates prices)
By Alistair Smout
LONDON, April 1 European stocks got off to a
brisk start in the second quarter, with merger-and-acquisition
activity driving gains by industrial and mining stocks.
Alstom rose 7.2 percent on Tuesday, making it the
top performer on the FTSEurofirst 300. The French turbine and
train maker said it would sell its heat exchange unit to Triton,
a European private equity group.
"Alstom are doing this from a position of weakness, as their
operating cash flow has been quite poor," said Neil Wilkinson,
European equities fund manager at Royal London Asset Management.
"It's more to shore up their balance sheet, while other
cases, like the Metso-Weir deal, are encouraging as they
indicate confidence in the markets that corporates are willing
to put their hands in their pockets to undertake M&A."
Finland's Metso benefited from a report that
Britain's Weir Group was interested in buying its
fellow engineering company, surging as much as 21 percent to the
top of the STOXX Europe 600 after Weir confirmed the
reports were true.
Weir Group fell 2.5 percent, the biggest decline on the
Investors also welcomed reports global mining company BHP
Billiton was weighing options to simplify its assets,
including a possible spin-off of unwanted businesses. Its shares
were up 2.3 percent.
"Ultimately it's a good move, a strategic move and they're
not being complacent. Within the mining sector, you have to be
even more focused," said Mike McCudden, head of derivatives at
The pan-European FTSEurofirst 300 index was up 0.4
percent at 1,339.37 points. Expectations of further economic
stimulus by U.S. and Chinese authorities helped to drive the
Weakness in China's manufacturing has led to speculation of
government spending to spur growth, boosting demand for basic
resources stocks. They gained 0.9 percent to be the
region's top sectoral riser.
Investors were also reassured by U.S. Federal Reserve Chair
Janet Yellen, who said monetary policy would need to remain easy
for some time.
The comments were seen as more dovish than her first news
conference as head of the central bank, when she said that the
Fed may raise rates as early as spring 2015, sending stocks
"Yellen's comments overnight calmed nerves somewhat, and
she's learning that every word and nuance she utters will be
pored over and analysed in every minute detail," RLAM's
Stocks are usually strong at the beginning of a new month,
as investors adjust portfolios and position for the month ahead.
But Tuesday's gain looked set to buck a recent losing streak.
The FTSEurofirst 300 has fallen every first trading day of
the month since November, after rising on 15 of the previous 18
first trading days.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Tom Heneghan)