BOJ takes further monetary-easing steps; euro-area economic sentiment rises By Aude Lagorce, MarketWatch LONDON (MarketWatch) -- European shares eked out small gains on Monday, as investors digested the latest deal news, including Sanofi-Aventis' publicly disclosed bid for Genzyme Corp., as well as additional easing measures from the Bank of Japan. The Stoxx Europe 600 index (ST:SXXP 251.72, +0.48, +0.19%) advanced 0.4% to 252.34, extending gains made Friday in the wake of Federal Reserve Chairman Ben Bernanke's promise to do everything necessary to keep the economic recovery on track. U.S. stocks advanced Friday, with the Dow Jones Industrial Average (DJIA 10,151, +164.84, +1.65%) rising 1.7%. Investors turned their gaze to the east on Monday, as the Bank of Japan unveiled additional monetary-easing steps to bolster the country's anemic economic recovery and try and combat the yen's rise. But the move appeared to disappoint investors who had been hoping for more aggressive action. Shares in Tokyo pared initial strong gains, though the Nikkei Stock Average still ended up 1.8%; the yen recovered after the BOJ's announcement. Read more about Asian markets. In the euro area, there was evidence Monday that the recovery remains on track. The economic sentiment indicator continued to improve in August, rising 0.7 of a point to 101.8, after a surge in July. Among the largest member states the U.K. registered the most significant gain, followed by Germany, which remains at the top of the table, the European Commission said. U.K. markets were closed Monday for a holiday. In Germany, the DAX 30 index (DX:DAX 5,955, +4.08, +0.07%) gained 0.2% to 5,962.12 and France's CAC 40 index (FR:PX1 3,498, -9.92, -0.28%) edged 0.1% higher to 3,510.65. "It's hard for the market to find a clear direction right now because it's stuck between two ideas," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets. On the one hand, there is widespread fear of a global economic slowdown, particularly in the U.S., he explained, and on the other hand there's a lot of quantitative easing coming, with Bernanke making very straightforward comments about his willingness to intervene. "That means that even bad economic data can lift the markets as it increases the likelihood of further Fed intervention," he said. All eyes will be on the latest snapshot of the U.S. labor market on Friday. M&A bonanza unlikely to abate The recent flurry of M&A deals continued, with several new tie-ups surfacing. In Paris, shares of Sanofi-Aventis (FR:SAN 45.70, +0.44, +0.96%) (SNY 28.92, +0.66, +2.34%) rose 1.2% after the drug maker publicly disclosed its offer to buy U.S. biotechnology company Genzyme Corp. (GENZ 67.62, +0.78, +1.17%) for $18.5 billion, or $69 a share. The firms have been in talks since July and financing is already in place, Sanofi said. Read more about Sanofi's offer. Separately, Sanofi said that a new daily treatment for multiple sclerosis taken by mouth met its primary endpoint in a phase III trial. In the aerospace sector, engine maker Safran (FR:SAF 18.92, -0.42, -2.15%) fell 2% after French newspaper La Tribune reported it's preparing a formal bid for airplane-seats specialist Zodiac Aerospace (FR:ZC 48.86, +5.50, +12.67%) and willing to pay a premium of up to 35%. The report, which cited unidentified people, said Safran will not go hostile and will decide whether to proceed with an offer in coming days. Zodiac shares surged more than 13%. In July, Zodiac rebuffed a first approach from Safran, arguing the companies have little in common and a deal would yield few cost savings. Another deal moving the markets on Monday came courtesy of U.S. chip giant Intel Corp. (INTC 18.37, +0.19, +1.05%) , which agreed to acquire the wireless business of Germany's Infineon Technologies AG (DE:IFX 4.52, -0.13, -2.69%) (IFNNY 5.94, +0.05, +0.85%) for about $1.4 billion in cash. Shares of Infineon fell 2% in Frankfurt. Thomas Becker, analyst at Commerzbank, said in a note to clients that the purchase price, while reasonable, "might be below ambitious market expectations." Read more about the Intel deal. Meanwhile, Spain's biggest lender Banco Santander (ES:SAN 9.24, +0.02, +0.26%) said it's bought a portfolio of U.S. car loans from HSBC Holdings Plc for $4 billion. The deal, however, will cost Santander just $342 million as the bulk of the portfolio is already financed. Santander shares rose 0.9% in Madrid. Gijsels of BNP Paribas Fortis Global Markets said further deals are likely to be announced in the coming weeks and months if the current market environment prevails. "There's €500 billion sitting on balance sheets in the European corporate sector alone," he said. "Unless we get a really nasty selloff or interest rates go up significantly, we're going to see further consolidation."

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