Greek Bailout Efforts Intensify

Mayank Mehta
09 Apr, 2010
New York City

European market averages gained more than 1% as politician and regulators decide final details of Greek bailout plan. Greek bonds yield declined from the peak reached yesterday but nervous investors are demanding nature of loan terms. Greece still needs to rollover

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European market averages gained more than 1% as politician and regulators decide final details of Greek bailout plan. Greek bonds yield declined from the peak reached yesterday but nervous investors are demanding nature of loan terms.[/R]

European investors are looking for specific details of Greek bailout plan as nervous investors drove Greek bond yields higher.

Fitch SA, the rating agency lowered long term local and foreign debt to BBB- from BBB+ with negative outlook.

Greek government bonds yield spreads closed down at 394 percentage points after surging to a record high of 442 percentage points since the introduction of the euro in 1999.

Sentiment in the market is rapidly deteriorating towards Greek bailout plan. The growing uncertainty about the bailout details and steady and rising withdrawals at Greek banks has prompted a chorus of analysts demand more details. The usual statement from the heads of states and central banks are inadequate in dealing with the bond market sentiment.

French President Nicholas Sarkozy told reporters that EU nations are “ready to come to the aid of Greece” and the president of European Union Herman Van Rompuy said that the EU is “ready to intervene.”

European Central Bank is holding emergency meeting later this evening and the EU regulators are and IMF officials are expected to release details of loan terms this weekend.

In London FTSE 100 Index closed higher 51.94 or 0.91% to 5,764.64, in Paris CAC 40 Index increased 65.80 or 1.65% to close at 4,044.26, in Frankfurt DAX index higher 74.43 or 1.21% to close at 6,246.26. In Zurich trading SMI increased 89.92 or 1.32% to close at 6,880.93.

The euro gained 0.7% to close at $1.3451 in Frankfurt trading.

Gainers & Losers

Air France-KLM added 3.3% to €12.27 after the airline said March passenger traffic rose 4.7%.

ArcelorMittal rose 0.6% to €45.79 and company scheduled shareholders meeting on May 11 at its registered office in Luxembourg.

Cegid Group SA the developer of enterprise business systems fell 0.4% to €22.30.

Comdirect bank AG rose 0.8% to €7.55.

EADS NV rose 1.5% to €14.77 and France will buy eight Casa CN-235 military transport aircraft from the company at a cost of $301 million.

Heurtey Petrochem SA rose 1.8% to €23.68 after the producer of oil-industry equipment announced that it has signed two contracts with Naphtha Industrial Serbia, controlled by the Russian company Gazprom for the modernization of the Pancevo refinery in Serbia.

Henkel AG & Co added 1.8% to €40.46 and the stock was upgraded its recommendation to “add” from “hold” at Commerzbank.

Salzgitter AG rose 0.5% to €69.91.

ThyssenKrupp AG advanced 1.2% to €26.62.

Total SA rose 1.5% to €44.24 said in a statement that its subsidiary, TEPA and its partners have made two important oil discoveries in Angola at the Nzanza-1 and Cinguvu-1 wells, in the deep waters of the Angolan offshore.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 0.91%, followed by Allianz SE of 0.90%, in Salzgitter AG of 0.66, in Fresenius Medical Care AG & Co. KGaA of 0.53%, and in SAP AG of 0.51%.

Henkel AG led gainers in the DAX index with a rise of 3.12%, followed by increase in E.ON AG of 2.28%, in Adidas AG of 2.20%, in RWE AG of 2.06%, and in Deutsche Bank AG of 1.69%.

CAC-40 Index Movers

Michelin SCA led the decliners in the CAC-40 index of 0.04%.

Bouygues SA gainers in the CAC-40 index with a rise of 5.50%, in LVMH SA of 3.94%, in PPR SA of 3.84%, in Electricite de Strasbourg SA of 3.13% and in AXA of 3.06%.