European Markets Gyrate; Inflation Up 3.1%

Arthi Gupta, Mayank Mehta and Sanjay Barot
02 Jul, 2010
New York City

European markets slump after U.S. non-farm payroll employment fell by 125,000 jobs in June. Euro-zone wholesale inflation accelerates to 3.1% but jobless rate stabilizes at elevated rate of 10% in May. Spanish jobless claims fall by 83,834 in June.

[R]7:00 PM Frankfurt - European markets slump after U.S. non-farm payroll employment fell by 125,000 jobs in June. Euro-zone wholesale inflation accelerates to 3.1% but jobless rate stabilizes at elevated rate of 10% in May. Spanish jobless claims fall by 83,834 in June.[/R]

Earlier, resource stocks edged higher after Australia agreed with miners lowered tax regime and restricted to top 15% of the companies in the industry.

In London FTSE 100 Index traded higher 41.43 or 0.86% to 4,847.18, in Paris CAC 40 Index increased 20.56 or 0.62% to close at 3,360.46, in Frankfurt DAX Index traded higher 21.08 or 0.36% to close at 5,878.51. In Zurich trading SMI Index increased 2.68 or 0.04% to close at 5,984.34.

Australia Prime Minister Julia Gillard announced an agreement with the country''s resources companies on a proposed mining tax.

""There will be no resources super profits tax,"" said Gillard in her announcement of what will instead be called the Minerals Resource Rent Tax. The settlement announced by Gillard cuts A$1.5 billion from the expected revenues resulting from the tax, which will be capped at 30% and affect only iron ore and coal. The original proposal capped the tax at 40%.

Euro-zone industrial producer prices rose 3.1% in May, larger than the 2.8% increase seen in April, the Eurostat reported today.

In the EU27, the industrial producer price index moved up 0.2% month-on-month, taking the annual growth to 3.7%.

Euro-zone jobless rate was stable at 10% in May, according to a report released by the European Union statistics office Eurostat today. The statistical office revised April''s rate to 10% from 10.1% reported initially. The rate was 9.4% in May 2009.

The jobless rate for EU 27 was stable at 9.6%, unchanged for the third straight month.

The number of people seeking jobless benefits in Spain decreased 83,834 in June to 3.98 million, according to official figures.

The Ministry of Employment and Immigration said jobless claims fell by 2% last month compared with May. The number of males seeking jobless benefits fell by 2.9% and the number of females was down 1.2%.

The Chloride Group said today that its board unanimously recommends acceptance of Emerson Electric Co.''s cash offer of 375 pence per share.

Consequently, Chloride said its board has withdrawn its recommendation of the offer by ABB Ltd. of 325 pence per share in cash, and will adjourn indefinitely the court and shareholder meetings scheduled for July 16, 2010 in connection with the ABB offer.

Gainers & Losers

Accor SA, the hotel chain fell 4.8% to €23.49.

ADVA AG Optical Networking rose 7.3% to €4.24 after the maker of networking equipment signs an agreement on investment from Juniper Networks. Based on this agreement, the management board of ADVA Optical Networking resolved to issue 551,471 ordinary shares to Juniper Networks in exchange for a $3.0 million investment.

Argan SA, the warehouse owner rose 0.7% to €11.59.

Bayer AG, the drugmaker fell 1.8% to €44.74.

Beneteau SA rose 4.6% to €11.20 after the construction and sale of recreational boats company said third quarter sales rose 16% to €316.7 million from €272.3 million a year ago. For nine months sales rose 11.5% to €569.4 million from €510.7 million a year ago.

BNP Paribas SA rose 1.9% to €44.35 after the bank and the BPCE Group, through Natixis, share a common will to provide credit that enhances their customers'' quality of life, by combining a high level of efficiency and responsibility.

Conergy AG rose 5.1% to €0.737 after the renewable energy company was upgraded to “hold” from “sell” at Berenberg Bank.

Continental AG rose 1.8% to €42.80 after the automotive industry supplier said first half sales rose 38% to about €12.5 billion from €9.06 billion a year ago. Adjusted earnings before interest and taxes for the first half are expected to be at least €1.2 billion compared to €248.8 million a year ago.

Daimler AG rose 1.5% to €41.04 after the carmaker today reported June sales of 18,997 vehicles, an increase of 25.4% with a 25.7% increase on a year-to-date basis.

GDF Suez SA, the natural gas and electricity supplier rose 0.4% to €22.89.

JCDecaux SA rose 0.2% to €18.83 after the outdoor advertising company renews and extends the advertising contract with the city of Tours, the Joué-les-Tours suburb and the SITCAT inter-municipal transport union.

Qiagen NV, the biotechnology company rose 1.2% to €15.60.

Siemens AG, the engineering company rose 0.7% to €73.21.

Volkswagen AG, the automobile manufacturer fell 0.1% to €68.60.