European Markets Gain; Carrefour To Buy Ipek

Arthi Gupta, Mayank Mehta and Sanjay Barot
18 May, 2010
New York City

European markets edge higher after debt woes ease and euro-zone finance ministers vow to fix the region''s finances. Greece receives first tranche of EU bail-out loan. Euro-zone trade surplus increases to

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European indices edge higher as Europe's debt woes ease. Greece receives first tranche of EU bail-out loan. Euro-zone trade surplus increases €4.5 billion and inflation rises 1.5%. Carrefour SA to buy Ipek for €24 million.[/R]

European indices edge higher as Europe's debt woes ease and euro-zone finance ministers vow to fix the region's finances to restore euro's credibility and help ease the impact of austerity measures on EU growth. Greece receives first tranche of EU bail-out loan. Euro-zone trade surplus increases €4.5 billion and inflation rises 1.5%.

Greece has received the first tranche of a €110 billion loan to help it overcome its debt crisis, the European Union has said. The European Commission said €20 billion from the EU and the International Monetary Fund had been drawn on.

The bail-out package for Greece which has an €8.1 billion bond repayment due on Wednesday was agreed earlier in May.

The €20 billion loan is made up of 14.5 billion from euro-area member states and €5.5 billion from the IMF.

The Greek government is determined to do the most dramatic budget reduction measures of the modern history and initial results were positive, Prime Minister George Papandreou said.

According to the transcript of CNN's """"Fareed Zakaria GPS"""" program aired on Sunday, Papandreou said his government cut budget by 40% compared to last year. He also said the government is on target to achieve a reduction in deficit from 13% of GDP to 3%

“Not everyone will accelerate consolidation in a very uniform way,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters today in Brussels after a meeting of ministers from the 16 euro countries. “That would lead to a very restrictive fiscal stance for the euro area as a whole, which would risk depressing economic growth.”

On Monday, euro-zone finance ministers insisted the euro was still credible despite its slide against the dollar. The European single currency fell to its lowest level against the dollar since 2006, amid concerns that debt problems will undermine Europe's recovery.

The euro rose 0.23% to $1.2422.

Preliminary estimate of the euro-zone trade surplus in March with rest of the world was €4.5 billion compared with an increased €1.6 billion a year-ago month. First estimate for the wider EU trade balance in February was €7.1 billion deficit.

Annual inflation in the euro area rose 1.5% in April compared to a gain of 1.4% in March. Monthly inflation increased to 0.5% in April. Compared to a year ago, annual inflation rose 2.0%.

Spain's largest builder Actividades de Construccion y Servicios SA said it plans to sell long-term bonds worth about €750 million to €1.5 billion to retail investors.

Basilea Pharmaceutica announced the inclusion of alitretinoin, or Toctino, in the guidelines and recommendations for the management of chronic hand eczema in Italy.

In London FTSE 100 Index traded higher 55.71 or 1.06% to 5,318.25, in Paris CAC 40 Index increased 7.41 or 0.21% to close at 3,567.77, in Frankfurt DAX index higher 54.02 or 0.89% to close at 6,110.73. In Zurich trading SMI increased 37.92 or 0.59% to close at 6,466.60.

Gainers & Losers

Accor SA, the hotelier advanced 2.5% to €41.40.

Air France-KLM, the airline company climbed 2.2% to €10.20.

Aixtron AG, the maker of equipment rose 2.2% to €26.25.

BMW AG, the luxury-car maker rose 1.9% to €39.45.

Carrefour SA rose 0.7% to €34.78. The retailer agreed to buy Turkish supermarket chain Ipek for about €24 million.

CeWe Color Holding AG added 1.1% to €26.50 after the photofinishing company said first quarter revenues rose 3% to €84.0 million from €81.7 million a year ago. Net loss for the quarter was €8.2 million or €1.20 per diluted share compared to net loss of €16.7 million or €2.44 per share a year ago.

Generali Deutschland Holding AG, the insurance group said first quarter gross premiums written fell 4.6% to €3.56 billion from €3.73 billion a year ago. Net profit for the quarter rose 197% to €89 million compared to net profit of €30 million a year ago.

NicOx SA surged 10.0% to €2.54. The drugmaker was downgraded to “sell” from “buy” at CM-CIC Securities.

Pernod Ricard SA rose 1.8% to €63.30 after the liquor maker was added to Bank of America Merrill Lynch Global Research’s “Europe 1” list of preferred stocks.

Renault SA rose 0.2% to €31.00. The carmaker was downgraded to “underweight” from “overweight” at Barclays Plc.

Veolia Environnement, the provider of environmental management services rose 1.6% to €21.46.