European stocks moved higher on Wednesday, led by gains for Alstom SA and Siemens AG after the two agreed to merge their rail operations.
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A weaker euro also helped boost the region's stock indexes, breaking out of days of rangebound trading.
The Stoxx Europe Index added 0.5% to 384.97, setting it on track for its fifth straight advance. If it closes at this level, it'll mark the highest finish since July 19, according to FactSet data.
Alstom-Siemens deal: Helping the pan-European benchmark move higher on Wednesday were shares of Alstom (ALO.FR) , which leapt 4.8%, and Siemens AG (SIE.XE)(SIE.XE) , which climbed by 1.8%.
The companies agreed to merge their rail operations (http://www.marketwatch.com/story/alstom-siemens-to-merge-creating-rail-giant-2017-09-26), aiming to create a European giant with the scale to fight growing competitive threats from state-backed Chinese rivals.
"Siemens-Alstom targets annual synergies of EUR470 million after four years, which looks overly ambitious, in our view," analysts at Deutsche Bank said in a note.
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"Unlike car making, economies of scale are not significant in train production and many smaller tier-2 suppliers have actually proven very successful at winning tenders," they added.
Indexes: The Siemens advance helped drive Germany's DAX 30 index up 0.5% to 12,661.95.
Meanwhile, France's CAC 40 index traded 0.1% higher at 5,275.96. Alstom isn't listed in the benchmark French index.
In the U.K., the FTSE 100 index rose 0.2% to 7,303.23 (http://www.marketwatch.com/story/ftse-100-set-to-break-2-day-losing-run-as-pound-slides-miners-rise-2017-09-27), getting a boost from a weaker pound .
Spain's IBEX 35 index rose 1.2% to 10,309.90, for now shrugging off concerns about Catalonia's independence referendum set for Sunday. The government in Madrid has said the vote is illegal and has ordered police deployed at polling stations to prevent people from voting, according to news reports.
Read:Disputed Catalonia independence referendum set for Oct. 1 (http://www.marketwatch.com/story/german-election-result-revives-eurozone-jitters-as-investors-turn-attention-to-spain-2017-09-25)
Euro slide: The euro fell to a one-month low against the dollar, fetching $1.1742 compared with $1.1795 late Tuesday in New York. The shared currency started falling on Monday after the German election, in which Chancellor Angela Merkel secured a fourth term in power but nonetheless registered a sharp drop in support.
The euro slide was then exacerbated by a rally in the dollar after Federal Reserve Chairwoman Janet Yellen on Tuesday reaffirmed expectations for a rate hike later in 2017 (http://www.marketwatch.com/story/yellen-says-fed-should-be-wary-of-raising-rates-too-gradually-2017-09-26), saying it would be "imprudent" to leave monetary policy on hold until inflation hits the central bank's target.
The euro is now down almost 2% since Friday, but some analysts don't think the drop will continue.
"Given the fundamental outlook of the euro these losses will probably not last for long: the ECB is close to delivering their asset purchases' tapering initiative which is essentially monetary tightening and this alone should be enough to reinvigorate demand for the shared currency," said Konstantinos Anthis, researcher at ADS Securities, in a note.
Stock movers: Shares of Telefonica SA (TEF) gained 2.5% after Berenberg upgraded the Spanish telecom firm to buy from hold, according to Dow Jones Newswires.
Fortum Oyj (FORTUM.HE) rose 0.9% after launching an EUR8 billion takeover offer for Uniper SE (http://www.marketwatch.com/story/fortum-makes-official-takeover-offer-for-uniper-2017-09-27)(UN01.XE) . Uniper shares fell 0.8%.
Shares of Electrolux AB (ELUXY) lost 3.1% after Goldman Sachs downgraded the Swedish home-appliance maker to neutral from buy.
Outside the Stoxx 600, shares of Carillion PLC (CLLN.LN) soared 18% after reports a Middle Eastern bidder is preparing a takeover for the U.K. construction-projects company.
(END) Dow Jones Newswires
September 27, 2017 05:47 ET (09:47 GMT)