Greek Worries, Euro Falls; Weak GDP

123jump.com Staff
07 Apr, 2010
New York City

European indexes traded lower and the benchmark index in Athens dropped 3%. Greek bond yields rose to 11-year high after Greece revised its 2009 deficit higher to 12.9%. Daimler and Renault-Nissan alliance signed a partnership to develop new technologies and build small cars.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European indexes traded lower and the benchmark index in Athens dropped 3%. Greek bond yields rose to 11-year high after Greece revised its 2009 deficit higher to 12.9%. Daimler and Renault-Nissan alliance signed a partnership to develop new technologies and build small cars.[/R]

Worries of Greece defaulting on its sovereign debt continue to hamper Greek bonds. In Athens trading yields on Greek 10-year bond yields increased 0.16 to 7.14%. Yield premium to German bonds widened to 4.03%, the largest spread in eleven years.

Greece government stressed again yesterday that it does not need international financial assistance but a team of financial advisors are in Athens working with Greek government.

Fourth quarter gross domestic product in the euro area and wider zone of 27 nations increased 0.1% compared to previous quarter. Seasonally adjusted GDP compared to the quarter a year ago decreased 2.2% in the euro area and 2.3% in the EU27 in the fourth quarter of 2009.

Industrial producer price index increased in February 0.1% from January in the euro zone and 0.7% in the wider EU27 area.

In London FTSE 100 Index closed lower 9.31 or 0.16% to 5,771.04, in Paris CAC 40 Index decreased 20.09 or 0.50% to close at 4,033.84, in Frankfurt DAX index lower 18.83 or 0.30% to close at 6,233.38. In Zurich trading SMI decreased 26.58 or 0.39% to close at 6,859.63.

The ASE Index in Athens dropped 3% and Finance Minister George Papaconstantinou said in an interview with Mega Television that Greece will revise its 2009 deficit to 12.9% from the previous estimate of 12.7%.

Daimler AG and Renault-Nissan agreed to enter into an alliance to build fuel efficient engines, develop small car technologies and share parts development costs.

Renault and Nissan each will take 1.55% stake in Daimler AG totaling 1.17 billion euros and Daimler will acquire 3.1% in Renault and same percentage in Nissan. The one time swaps are not expected to be increased according to the companies.

Automakers are looking for partnerships as the cost of new product development keep rising and global sales remain weak. Tougher environmental regulations are also driving companies to find ways to trim carbon emissions.

Dieter Zetsche, Daimler AG Chief Executive and Carlos Ghosn leader of Renault and Nissan alliance will head 12-member team that will monitor partnership progress.

The agreement is expected to save 4 billion euros in the next five years and Nissan and Daimler may build cars at each other’s plants in U.S. but there are no plans to build new factories, Carlos Ghosn said in an interview after the announcement.

Gainers & Losers

Akka Technologies SA the engineering consulting company advanced 2.6% to €13.78.

Burelle SA added 0.8% to €116.00 after the manufacturer of automobile equipment and plastics said 2009 revenues fell 9% to €2.46 billion from €2.70 billion a year ago. Net profit for the year was €14.7 million compared to net loss of €44.9 million a year ago.

Compagnie de Saint-Gobain SA climbed 2.1% to €37.04 after the supplier of building materials was upgraded to “neutral” from “sell” at Goldman Sachs Group Inc.

Delachaux SA increased 5.6% to €42.70 after the manufacturer of equipment for the cable and fiber-optic industries said 2009 revenues fell 18% to €636.0 million from €775.6 million a year ago. Net profit for the year fell 19% to €53.3 million compared to net profit of €65.5 million a year ago.

Electricite de Strasbourg SA fell 0.02% to €41.26 after the company has called for a meeting of its board on April 16 to decide over the potential sale of its U.K. electricity distribution asset, a person familiar with the matter told Dow Jones Newswires on Tuesday.

Hamburger Hafen und Logistik AG fell 0.4% to €28.28 after the port manager was downgraded to “neutral” from “buy” at Nomura Holdings Inc.

Hochtief AG the global construction group rose 1.4% to €65.07.

LVMH Moet Hennessy Louis Vuitton SA slipped 1.6% to €86.91 after luxury-goods manufacturer was downgraded to “neutral” from “outperform” at Credit Suisse Group AG.

Publicis Groupe SA dropped 0.9% to €31.81 after the advertising agency announced today that it has acquired Toronto-based In-Sync.

Renault SA dropped 1.7% to €36.22 after the carmaker and its Japanese alliance partner Nissan Motor Co. announced Wednesday a business and capital tie-up agreement with Germany''s Daimler AG that will speed up the development of new technologies and save parts costs.

Riber SA rose 0.6% to €1.48 after the maker of machines to produce semiconductor wafers has sold an MBE49 production system to optical component maker Connector Optics LLC of St Petersburg, Russia.

Total SA fell 0.09% to €44.36.

ThyssenKrupp AG rose 1.2% to €26.65 after the company was upgraded to “overweight” from “underweight” at Morgan Stanley.

Vestas A/S increased 7.4% to 329.80 kroner after the wind turbine maker won eight order in less than a month according to local media reports in Denmark.

Volkswagen AG the carmaker slipped 0.3% to €70.80.