European Markets Fall after 6-Day Rally

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

The European markets pared six sessions of gains after financial stocks declined. German Chancellor Angela Merkel says credible fiscal consolidation vital for self-sustaining growth. Euro-zone inflation eases to 1.4% and industrial output rises 0.9% in May.

[R]4:00 PM Frankfurt – The European markets pared six sessions of gains after financial stocks declined. German Chancellor Angela Merkel says credible fiscal consolidation vital for self-sustaining growth. Euro-zone inflation eases to 1.4% and industrial output rises 0.9% in May.[/R]

U.S. equities and Asian markets rose after Intel reported better-than-expected sales. Italy inflation eases in June.

Euro-zone consumer price inflation eased to 1.4% in June from 1.6% recorded in May, the European Union statistics office Eurostat confirmed today. A year earlier, inflation was negative 0.1%.

On a monthly basis, the consumer price index, or CPI, was flat in June.

The statistics office also said the EU annual inflation eased to 1.9% in June from 2% in May. A year earlier, the rate was 0.6%.

Euro-zone industrial output rose for a third consecutive month in May, although at a slower pace. Industrial production rose 0.9% in May, according to data released by the European Union statistics office Eurostat today. It followed an increase of 0.9% in April, which was revised from 0.8% rise reported initially.

On an annual basis, industrial output climbed 9.4%.

Italy''s consumer price index, or CPI, including tobacco rose 1.3% in June from the previous year, a final report from the statistics office Istat revealed today. In May, inflation was 1.4%. Alcoholic beverages and tobacco prices grew 2.2% annually in June, while clothing and footwear prices rose 1%.

On a monthly basis, the CPI remained unchanged in June, after rising 0.1% in May. Food and non-alcoholic beverages prices rose 0.1% and clothing and footwear prices also grew 0.1%. Transport charges fell 0.3%.

German Chancellor Angela Merkel said today that credible consolidation of public finances is an important pre-condition for self-sustaining growth.

In an editorial piece for German business daily Handelsblatt, Merkel wrote that successful budget consolidation creates more leeway for the government and private investors and allows central banks to keep interest rates low as long as possible. Moreover, it strengthens confidence, she added.

BP Plc announced that the integrity test did not commence on MC252 Well as the National Incident Commander announced that additional analysis of the well testing procedure should be performed before starting the test.

Europe Markets Review

In London FTSE 100 Index traded lower 40.38 or 0.77% to 5,230.64, in Paris CAC 40 Index decreased 22.16 or 0.61% to 3,615.60 and in Frankfurt DAX index traded lower 8.20 or 0.13% to 6,182.93. In Zurich trading SMI decreased 16.07 or 0.26% to 6,282.52.