European Markets Climb on BP Hopes

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

The European markets soar amidst hopes that BP Plc is making significant progress to contain the oil spill. Fitch affirms Denmark IDRs at ''AAA'' and stable outlook. Greek import prices growth slow in May. Portugal CPI edges higher in June.

[R]7:00 PM Frankfurt – The European markets soar amidst hopes that BP Plc is making significant progress to contain the oil spill. Fitch affirms Denmark IDRs at ''AAA'' and stable outlook. Greek import prices growth slow in May. Portugal CPI edges higher in June.[/R]

Finance ministers from the 16 euro area countries are scheduled to begin a meeting later in the day to discuss stress tests being conducted on the region''s lenders among other issues.

MRC Technology announced that it has entered into an agreement with Genentech Inc., a wholly- owned member of the Roche Group, for an exclusive license to a series of small molecule drug candidates for the potential treatment of neurological disease.

In London FTSE 100 Index traded higher 17.43 or 0.34% to 5,150.37, in Paris CAC 40 Index traded higher 5.51 or 0.16% to close at 3,559.99, in Frankfurt DAX Index traded higher 16.82 or 0.28% to close at 6,082.06. In Zurich trading SMI Index traded lower 1.81 or 0.03% to close at 6,208.68.

Fitch Ratings today affirmed Denmark’s long-term foreign and local currency issuer default ratings at ''AAA'', respectively. The outlook on the IDRs are stable. Fitch has simultaneously affirmed Denmark''s country ceiling at ''AAA'' and the short-term foreign currency IDR at ''F1+''.

The rating agency said Denmark''s ''AAA'' fundamentals remain solid, despite suffering a relatively severe recession. Fitch noted that the country''s central bank''s ability to successfully manage its peg to the euro has boosted the credibility of Denmark''s fixed exchange rate regime. Moreover, pressures on Denmark''s banking system have also eased substantially since last year as government support measures helped to ensure the availability of liquidity.

""Denmark has successfully weathered a number of major stress tests since the peak of the global financial crisis in 2008, including on its exchange rate - which has since seen pressure subside owing to successful management of the peg and renewed confidence in the Danish krone,"" said Maria Malas-Mroueh, Associate Director in Fitch''s Sovereign team.

Greece''s import price inflation in May slowed for the first time in eight months, according to data released by the Hellenic Statistical Authority today.

The import price index grew 7.8% year-on-year compared to April''s 10.1% rise. The statistical agency said the annual rise in the import price index reflects 1.3% increase in the import price index of the euro-zone market and 14.7% rise in non-euro-zone market.

On a monthly basis, import prices fell 0.5% in May compared to a 1.5% increase in April. The decline was caused by a 2.2% drop in import prices of energy.

Portugal''s consumer price annual inflation inched up in June as prices of transports and products and services related to housing put upward pressure, Statistics Portugal said Monday.

The consumer price index rose 1.2% year-on-year in June following an increase of 1.1% in May. On a monthly basis, the CPI climbed 0.2%.

British energy giant BP Plc, which is striving to raise funds to pay for the U.S. oil spill, is in talks with independent oil and gas producer Apache Corp. to sell some assets including its Alaska oil fields, media reports said citing people familiar with the matter.

In a significant progress in containing the gush of crude oil from the ruptured oil well in the Gulf of Mexico, oil giant BP plc''s underwater robots are steadily assembling a tighter Capping Stack to the Deepwater Horizon blowout preventer after removing a defective cap.

U.S. media quoted Coast Guard Commander Thad Allen, who is coordinating the government response to the Gulf oil spill, as saying today that ""Significant progress"" has been achieved in efforts to recap the leaking oil well.

The UK economy expanded 0.3% sequentially in the first quarter, according to data released from the Office for National Statistics. The first quarter growth figure was unchanged from the estimate published in May, but smaller than the 0.4% growth seen in the fourth quarter of 2009.

Alstom SA has secured a €100 million contract to supply 90MW of turbines to a Brazilian group.

Gainers & Losers

Centrosolar Group AG, the photovoltaic industry surged 9.1% to €5.29.

Deutsche Telekom AG fell 1.2% to €9.85 after the integrated telecommunications provider presented the personal conference in time for the 2010-2011 Bundesliga season.

Fraport AG increased 1.7% to €37.40 after the owner and operator of the international airport recorded a 1.4% rise in passenger figures year-on-year welcoming about 24.5 million passengers in the first six months of 2010.

Gerresheimer AG, the manufacturer of specialty products rose 0.07% to €28.72.

Groupe SEB rose 5.8% to €58.20 after the manufacturer of small household equipment was upgraded to “buy” from “neutral” at Goldman Sachs Group Inc.

Kontron AG plunged 15.8% to €6.38 after the provider of embedded computer technology is forming a €34 million risk provision for outstanding receivables due from customers in Malaysia, Taiwan and Hong Kong.

Merck KGaA rose 1.2% to €60.66 after the pharmaceutical and chemical company announced today that the Russian Federal Service on Surveillance in Healthcare and Social Development has become the first government agency to grant marketing approval to Cladribine Tablets for the treatment of relapsing-remitting multiple sclerosis.

Orco Property Group SA increased 5.1% to €5.10 after the real estate company announced the closing of a sale in Warsaw and the recovery of €11.9 million of free cash.

Siemens AG, the engineering company rose 1.0% to €73.97.

Theolia SA, the wind-power company fell 3.8% to €1.24.

Zodiac SA edged higher 4.0% to €41.44 after the aeronautical company considered a letter sent by the president of the management board of Safran for the proposal of an industrial combination of the two groups.

Volkswagen AG advanced 0.8% to €71.20 after the automobile manufacturer fulfilled its target this year of reducing energy consumption of vehicles sold in China by 20% compared to 2005.