Rates on Hold in Europe; Greece

Arthi Gupta
05 Aug, 2010
New York City

The European indexes declined after the ECB holds key interest rate at 1%. Greece to receive

[R]4:00 PM Frankfurt – The European indexes declined after the ECB holds key interest rate at 1%. Greece to receive €9 billon loan as economic recovery program is on track. German factory orders surge in June. Spanish industrial production eases in June.[/R]

U.S. and European markets fall after disappointing initial jobless claims. Asian markets traded mixed.

National Incident Commander Admiral Thad Allen stated that he authorized BP Plc to cement its damaged well based on the successful completion of the static kill procedure and a positive evaluation of the test results.

In Paris CAC 40 Index increased 10.66 or 0.28% to close at 3,771.38 and in Frankfurt DAX Index edged higher 4.80 or 0.08% to close at 6336.13.

The European Central Bank left its key interest rate unchanged at a record low of 1% for the fifteenth consecutive month in August. The Governing Council, led by President Jean-Claude Trichet retained the key interest rate at 1% at the meeting held in Frankfurt.

The Greek government made good progress to its economic program, according to a joint statement released by the European Union, the European Central Bank and the International Monetary Fund today.

The European Commission, the ECB and the IMF staff teams unveiled the results of Greece''s austerity program review started on July 26. The agreement reached with the Greek authorities paves the way for the disbursement of loan worth €6.5 billion by the euro area member states and €2.5 billion by the IMF, which is subject to approval by the European Commission, the Euro group, and the IMF''s management and Executive Board.

The IMF official noted that the Greek government kept its spending significantly below budget limits at the state level and impressive progress was made on structural reforms.

German factory orders rose more than expected in June following a slight fall in May driven by a surge in global demand, according to data released by the Federal Ministry of Economics and Technology today.

Orders edged higher 3.2% in June compared to a revised fall of 0.1% in May. Domestic orders rose 0.3% in June reversing a 0.5% fall in May. On an annual basis, total factory orders grew 24.6% in June compared to May''s revised 25.1% gain.

Spanish industrial production grew at a slow pace for the fourth straight month in June, according to official data released today. Industrial production in Spain rose 3.1% year-on-year in June as against a 5% increase in May, the statistics office INE said.

Gainers & Losers

A.S.T. Groupe declined 0.82% to €3.62 after the French builder said first-half revenue declined to €40.8 million from €43.4 million in the year-ago period.

Bayer AG surged 3.62% to €48.25 after the German pharmaceutical firm said that its blood-thinner rivaroxaban or Xarelto drug was as effective as the standard therapy warfarin in preventing blood clots in the lungs and legs.

BioAlliance Pharma SA gained 4.07% to €5.88 after the biopharmaceutical company reported Gilles Avenard resigned as deputy chief executive officer. The board named Pierre Attali as chief operating officer.

Commerzbank AG fell 0.94% to €7.14 after the German-based bank swung to a net profit of €352 million in the second quarter compared with a loss of €761 million a year earlier.

Deutsche Telekom AG dropped 1.05% to €10.39 after the German telecom company reported a decline in profit for the second quarter, reflecting deconsolidation of T-Mobile UK, as well as lower revenues from Germany and Europe.

Net revenue in the quarter decreased 4.4% to €15.53 billion from €16.24 billion in the comparable period. Net profit dropped 8.8% to €475 million from €521 million in the year-ago quarter.

Telecom Italia SpA dipped 0.44% to €13.71 after the Italian telecom company and its labor unions reached an agreement on cutting 3,900 jobs over the next three years.

Zurich Financial Services AG rose 1.18% to $23.68 after the insurance-based financial services provider reported total financial results take into account the impact of the previously reported charge from increased banking loan loss provisions of $330 million, before tax.