European Indexes Fall; Q-Cells Soars

Arthi Gupta
12 Aug, 2010
New York City

The European indexes declined after U.S. weekly jobless claims rose and euro-zone industrial output dipped in June. The ECB estimated moderate growth in the euro area. Hungarian banks tightened household lending conditions.

[R]4:00 PM Frankfurt – The European indexes declined after U.S. weekly jobless claims rose and euro-zone industrial output dipped in June. The ECB estimated moderate growth in the euro area. Hungarian banks tightened household lending conditions.][/R]

U.S. and Asian markets fell amidst disappointing economic data. Swedish inflation accelerated in July. Greek economy contracted in the second quarter. Italian inflation rose in July and trade deficit widened in June.

In Paris CAC 40 Index dropped 30.40 or 0.84% to close at 3,597.89 and in Frankfurt DAX Index edged lower 31.81 or 0.52% to close at 6,122.26.

Euro-zone industrial production unexpectedly fell in June. This was the first decline in four months. The seasonally adjusted industrial production dropped 0.1% month-to-month in June compared to an upwardly revised 1.1% rise in May, according to a report released by Eurostat today.

On an annual basis, industrial production rose 8.2% versus a revised 9.9% growth in May.

The EU-wide bank stress-test exercise was comprehensive and rigorous and was an important step forward in restoring market confidence, the European Central Bank reaffirmed in its latest monthly bulletin published today.

The ECB Governing Council estimated the euro area economy to grow at a moderate and still uneven pace, in an environment of uncertainty. The ECB repeated that its current key interest rates remained appropriate.

Swedish consumer prices increased for the tenth consecutive month in July and at a faster pace than the previous month, according to official data released today. The price growth was driven mainly by higher electricity and fuel costs.

The annual inflation accelerated to 1.1% in July from 0.9% in June, Statistics Sweden said. Prices of electricity and fuels increased 4.2% year-on-year.

Italy''s inflation rate rose to its highest in 19 months in July as higher electricity and transportation costs boosted the overall price index, according to official figures released today. Year-on-year, consumer prices edged higher 1.7% compared to the 1.3% inflation rate in June, according to a report published by the Statistics office ISTAT today. On a monthly basis, consumer prices edged up 0.4%.

Italy recorded a foreign trade deficit of €3.1 billion in June compared to a €0.9 billion deficit in the same month a year ago, the government said today.

Exports increased 22.8% and imports recorded an increase of 30.4% in June over the same month last year. On a monthly basis, exports increased 5.6% in June, while imports rose 3.2%.

Hungarian banks tightened their conditions on the minimum required credit score and on the maximum payment-to-income ratio level in the household segments in the second quarter, the lending survey conducted by the Magyar Nemzeti Bank showed today.

The survey found that the ratio of restructured loans to the outstanding rose to 4.4% in the second quarter from 3.5% in the corporate segment, and to 6.1% from 5.2% in the household segment.

The Greek economy contracted at a faster pace in the second quarter, according to a latest report from the statistics office released today.

The gross domestic product at constant prices fell 3.5% year-on-year in the second quarter compared to 2.3% decline in the previous quarter. The GDP decreased for the sixth consecutive quarter since the first quarter of 2009.

In another report, the statistics office said, the jobless rate rose 12% in May 2010 from 8.5% in May 2009. The number of unemployed increased 181,784 persons to 602,185 in May 2010.

Gainers & Losers

Anheuser-Busch Inbev NV surged 4.90% to €41.06 after the brewer reported second-quarter normalized profit attributable to equity holders rose 27% to $1.440 billion compared to $1.134 billion in the prior year.

Lonmin Plc dropped 0.53% to 1,497.00 pence after the platinum producer said the South African government rescinded its August 3 order that contained an order to refrain from selling non-platinum group metals.

Q-Cells SE surged 8.19% to €5.67 after the German solar company reported sales in the first half soared 59% to €565.7 million from a year earlier.

Unibail-Rodamco SA declined 1.63% to €144.85 after the France-based commercial property operator stocks were downgraded to “neutral” from “buy” at BofA Merrill Lynch.

Vivendi SA SP gained 1.36% to €23.16 after the media firm reported an autonomous international institution reaffirmed its original ruling and financial award in favor of the company in a 13-year dispute with the Argentine government.

Wimm-Bill-Dann Foods OJSC advanced 3.11% to 18.87 ruble after the Russian dairy and juice provider announced an agreement to purchase Danone''s 18.4% stake in the company for a total consideration of $470 million.