Greek Yields Surge to 11-Year High on Rumors

Mayank Mehta
06 Apr, 2010
New York City

European markets closed higher but Greek benchmark index decreased 2%. Greek bond yields surged to 11-year high on the unfounded rumors that the nation is looking to change bailout terms with the EU and the IMF. Renault SA and Daimler AG are in partnership talks. SeaDrill Ltd of Norway surges.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets closed higher but Greek benchmark index decreased 2%. Greek bond yields surged to 11-year high on the unfounded rumors that the nation is looking to change bailout terms with the EU and the IMF. SeaDrill Ltd of Norway surged on a new order. Renault SA and Daimler AG are in advanced talks to form a partnership and cross investments.[/R]

European markets closed higher in the region after two days of Easter holidays. Markets in the region traded up on the Friday report that the U.S. employment in March increased and Australia raised rates.

The euro decreased and Greek bonds dropped with the yield spreads to German bonds surged to record 4% on the worries that the EU led bailout may not be sufficient. Media reports also suggest that Greece prefers to not involve the International Monetary Fund in the bailout plan.

Finance Minister George Papaconstantinou later denied and said in a statement that Greece has not been looking to change the terms that were agreed with the European Council.

In London FTSE 100 Index closed higher 35.46 or 0.62% to 5,780.35, in Paris CAC 40 Index increased 19.71 or 0.49% to close at 4,053.94, in Frankfurt DAX index higher 16.65 or 0.27% to close at 6,252.21. In Zurich trading SMI decreased 2.71 or 0.04% to close at 6,886.21.

The ASE index in Greece declined 2% on the rumors that Greece is looking to change the EU brokered bailout plan. The rumors were denied by finance minister Papaconstantinou.

Gainers & Losers

Bayer AG dropped 0.4% to €50.43 after the drugmaker was upgraded “buy” in new coverage at Royal Bank of Scotland Group Plc.

Bourbon SA added 1.7% to €33.90 after the fleet of supply and crew ships for the oil industry was downgraded to “sell” from “reduce” at AlphaValue.

Daimler AG rose 0.5% to €35.52 after the Renault SA and Nissan Motor Co. expect to save “billions of euros” by sharing development costs as part of an equity-swap alliance, according to a Bloomberg report.

Deutsche Boerse AG the operator of the Frankfurt stock exchange rose 0.6% to €55.99.

Le Carbone Lorraine SA the maker of industrial fuses rose 1.2% to €27.84.

EADS NV dropped 0.8% to €15.12 after the plane maker and defense contractor was trying to win more time to prepare a bid for the Pentagon''s multibillion-dollar refueling aircraft contract.

Hannover Rueckversicherung AG the reinsurer rose 0.1% to €37.41 and HeidelbergCement AG the maker of cement rose 0.9% to €42.45.

Orpea SA the commercial retirement-home operator rose 0.5% to €31.88.

Piscines Desjoyaux SA the maker of swimming pools closed unchanged at €8.00.

Renault SA increased 3.0% to €36.57 after the automobiles and related services its Japanese alliance partner Nissan Motor Co., Ltd. and Germany''s Daimler AG are likely to announce partnership and cross shareholding plans as early as Wednesday.

Sea Drill Ltd surged 6.5% to 147.70 kroner after the company said it was awarded a five-year contract of $756 million. The company also plans to list its shares on the New York Stock Exchange.

Societe Generale SA the bank rose 0.1% to €47.42.

DAX Index Movers

Bayer AG led the decliners in the DAX index of 1.25%, followed by Beiersdorf AG of 1.01%, in Fresenius Medical Care AG & Co. KGaA of 1.00, in Merck KGaA of 0.10%, and in SAP AG of 0.06%.

MAN SE led gainers in the DAX index with a rise of 3.78%, followed by increase in Infineon Technologies AG of 2.99%, in Salzgitter AG of 2.91%, in ThyssenKrupp AG of 2.52%, and in Volkswagen AG of 2.14%.

CAC-40 Index Movers

Michelin SCA led the decliners in the CAC-40 index of 1.12%, in Sanofi-Aventis of 0.94%, in Societe Generale SA of 0.88%, in L''Oreal SA of 0.66% and in EADS NV of 0.66%.

ArcelorMittal gainers in the CAC-40 index with a rise of 3.98%.followed by increase in Renault SA of 3.86%, in Technip of 3.41%, in Vallourec SA of 2.92% and in STMicroelectronics N.V. of 2.60%.