Foreign Markets Are Mostly Flat

European and Asian shares started the week mixed but largely flat, with pharmaceutical stocks the only gainers of note as the U.S. markets were closed for a public holiday Monday.

Pharmaceutical issues gained after Novartis of Switzerland agreed to buy generic drug makers Hexal and Eon Labs and after a U.S. Food and Drug Administration advisory panel recommended Friday that Merck be allowed to reintroduce its Vioxx painkiller. The sector’s rise was countered by falling utility stocks as markets factored in a rise in bond yields.

Otherwise, traders said many markets were taking advantage of the U.S. long weekend to take a breather ahead of economic data due for release in the United States and Germany this week. U.S. financial markets were closed for Presidents Day.

London’s FTSE-100 index closed 0.07% higher at 5,060.80. Pharmaceutical companies GlaxoSmithKline, AstraZeneca and Shire Pharmaceuticals Group were the biggest gainers.

In Frankfurt, the DAX index of blue-chip stocks was down 6.13 points, or 0.1%, to 4,353.34. In Paris, the CAC-40 index fell 6.4 points, or 0.2%, to 4,022.62.

Analysts said the pharmaceutical sector was cheered by the recommendation Friday by the FDA panel that Vioxx should be sold again in the U.S. with the strictest safety warning on its label, providing a confidence boost for similar drugs from European companies. Merck pulled Vioxx from the market in September on concerns about increased risk of heart attacks and strokes.

That news was bolstered Monday by Novartis’ proposed purchase of generic drug makers Eon Labs of Lake Success, N.Y., and Hexal of Germany for $8.3 billion. The deal would create the world’s largest generic drug company.

Novartis shares rose nearly 3% on the Zurich exchange. In London, AstraZeneca gained 4%, Glaxo advanced more than 4% and Shire rose more than 3%.

Utility stocks were among the biggest losers after U.S. Treasury yields rose sharply Friday after the release of producer price data showing core inflation rising at its fastest pace in six years. Shares of RWE in Germany fell more than 3% and French utility giant Suez slid more than 4%.

In Asia, stock markets were mixed, with Tokyo’s bourse slipping slightly on profit taking and Hong Kong shares ending flat.

The Nikkei-225 index slid 9.10 points, or 0.08%, to 11,651.02 points. On Friday, the index gained 77.40 points, or 0.67%, to 11,660.12 -- its highest finish since July 2.

The index slipped after investors sold blue chips in the technology and automobile sectors to take profits. Technology stocks Canon, Sony and Hitachi all declined. Honda and Toyota also fell.

In Hong Kong, investors mostly stuck to the sidelines ahead of an earnings report from banking giant HSBC. The blue-chip Hang Seng index rose 23.78 points, or 0.2%, to 14,111.65 after trading between 14,045.71 and 14,113.93 during the session.