* FTSEurofirst 300 up 0.4 pct, gains for second session
* M&A activity boosts food shares; Unilever up 2.8 percent
* Technical picture improves after recent gains
By Atul Prakash
LONDON, Sept 27 (Reuters) - European equities extended the
previous session's sharp gains on Monday, with food and
beverages shares featuring among the top gainers on news that
Unilever <ULVR.L> is to acquire a U.S. company for $3.7 billion.
By 0752 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.4 percent at 1,082.65 points after
gaining 1.2 percent on Friday.
Consumer goods giant Unilever rose 2.8 percent after the
company said it agreed to buy United States-based hair care
group Alberto Culver Co <ACV.N>. []
In other news, a source said on Monday that China's Bright
Food Group would explore the purchase of Britain's United
Biscuits, a deal that at roughly $3.2 billion would be the
largest ever international purchase by a Chinese company in the
food and beverage sector. []
The STOXX Europe Food and Beverage index <.SX3P> rose 0.8
percent, while Pernod Ricard <PERP.PA>, Orkla <ORK.OL> and CSM
<CSMNc.AS> advanced 0.6 to 2.3 percent.
"We are now seeing a lot of corporate activity. I don't
think we would see this unless there was a certain degree of
confidence that the outlook was reasonably promising," said Mike
Lenhoff, chief strategist at Brewin Dolphin.
"If you look at the overall background, we have got interest
rates likely to remain where they are in the major economies for
a long period of time, we have got a recovery that is underway
and is likely to be sustained, and the underlying tone of some
of the newsflow is strong."
On Friday, better-than-feared U.S. macro economic data
helped the European stock market snap a three-day losing run.
Figures showed new orders for long-lasting U.S. manufactured
goods excluding transportation gained ground last month while
business spending rebounded.
TECHNICAL OUTLOOK IMPROVES
Technical picture also improved after recent gains in share
prices. The Euro STOXX 50 <>, the euro zone's blue chip
index, rose 0.4 percent to 2,803.81 points to hover above its
200-day moving average of 2,776.09.
The index faces strong resistance at 2,805.95 points, which
represents the 61.8 percent Fibonacci retracement of a slide
from an April high to a May low, as well as at 2,827.44 points,
a six-week high hit last week.
Miners were among the top gainers on hopes that a global
economic recovery will boost demand for raw materials. The STOXX
Europe Basic Resources index <.SXPP> was up 0.7 percent.
BHP Billiton <BLT.L>, Anglo American <AAL.L>, Antofagasta
<ANTO.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L> and Eurasian
Natural Resources <ENRC.L> rose 0.2 to 1 percent.
Nestle <NESN.VX>, the world's biggest food group, was up 0.5
percent. The company is creating a new unit to focus on
healthcare nutrition, underlining the group's focus on the
profitable health and wellness area. []
But AstraZeneca <AZN.L> fell 0.8 percent as its experimental
prostate cancer pill zibotentan failed to improve survival in a
late-stage clinical trial, dealing a fresh blow to the company's
oncology pipeline. []
"This news extends a period of poor results for
AstraZeneca's oncology franchise with Zactima and Recentin
failing to live up to expectations," said Brian White, analyst
at Shore Capital.
"Despite consensus forecasts suggesting 2015 sales in excess
of $500 million on a non-risk adjusted basis and some excitement
(elsewhere) in the investment community about the potential for
zibotentan given its novel mechanism, we felt that this was a
high risk approach."
(Editing by Sharon Lindores)
