European Indexes Down; Heineken Net Soars

Arthi Gupta
25 Aug, 2010
New York City

The European indexes dropped after weak economic data in the U.S. German building industry orders climbed in June and business confidence rose in August. Spain

[R]4:00 PM Frankfurt – The European indexes dropped after weak economic data in the U.S. German building industry orders climbed in June and business confidence rose in August. Spain’s producer prices increased 3.2% in July.[/R]

U.S. and Asian markets declined on global economic growth.

The Hungarian government said it is not seeking new IMF loans. Hungary retail sales dipped in June, Swedish consumer confidence improved in August and Greece’s trade deficit narrowed in June.

Standard & Poor’s on Tuesday downgraded the Republic of Ireland''s sovereign debt rating. The rating agency said the rising cost of supporting the financial sector will further worsen the country''s finances.

The agency cut the rating by one notch to AA- from AA and maintained its negative outlook on the ratings of Ireland''s debt.

In Paris CAC 40 Index decreased 56.15 or 1.61% to close at 3,434.96 and in Frankfurt DAX Index edged lower 52.20 or 0.88% to close at 5,883.24.

Germany''s building industry orders increased in June from the previous year. The total value of orders received by building construction and civil and underground engineering enterprises increased 0.3% year-on-year in June, compared to a 0.5% fall in May. Building construction orders increased 14.2% on an annual basis, while civil and underground engineering orders decreased 10.7%.

The number of employees engaged in the building industry totaled 703,000 in June, which was a decrease of 12,000 persons from the previous year.

German business sentiment increased in August suggesting improving business conditions. The Ifo Institute''s business climate index rose to 106.7 in August from 106.2 in July, according to reports released today.

Swedish consumer confidence improved more than expected in August, according to the National Institute of Economic Research today. The corresponding index rose to 25.2 in August from 23.3 in July.

The Hungarian Economy Ministry said today that the country does not need a new credit agreement with the International Monetary Fund.

In a statement, the ministry said that the talks scheduled with the IMF later this year will be a regular country review. ""The autumn negotiations should not aim for a new loan agreement,"" the ministry said. It added that the ministry sticks to its 2010 budget deficit target of 3.8% of gross domestic product.

Hungary''s retail sales continued to decline in June, according to a report by the Hungarian Central Statistics Office published today.

Retail sales dropped a seasonally adjusted 0.1% on a monthly basis in June, compared to a 0.5% fall in May. Retail sales decreased for the fourth consecutive month. Retail trade in food, beverages and tobacco fell 0.1% in June after a 0.1% rise in May.

Retail sales declined 4.6% in June from a year ago compared to a 4.8% drop recorded in May.

Spain’s producer prices rose 3.2% in July matching the rate in June, according to a report released by the statistics office INE today. On a month-over-month basis, producer prices decreased 0.2% in July compared to a 0.1% increase in June.

Greece''s trade deficit narrowed to €1.56 billion in June from €2.75 billion in the same period of last year, according to the Hellenic Statistics Authority report released today.

The exports totaled €1.41 billion in June 2010 compared to €1.24 billion in June 2009. Annually, exports grew 13.4%. At the same time, the total value of imports slumped 25.6% to €2.96 billion.

Gainers & Losers

Air Berlin Plc dipped 0.18% to €3.33 after the German air carrier reported a second-quarter net loss despite a €11.3 million tax benefit.

Heineken Holding NV gained 0.30% to €30.33 after the beermaker reported first-half sales rose 5.2% to €7.52 billion. Net income surged 42% percent to €695 million or 1.31 euro cents a share.

Scor SE slumped 4.88% to €1.95 after the French reinsurer''s rating outlook was upgraded to ""positive"" from ""stable"" by Fitch Ratings.

Talvivaara Mining Company Plc dropped 3.31% to 388.20 pence after the Finland-based mining company reported second-quarter net sales soared 2036% to €35.25 million from €1.65 million in the comparable period. Net loss for the period widened 610% to €16.76 million or 6 euro cents a share as against net loss of €2.36 million or 1 euro cent a share a year earlier.

SNS Reaal Groep NV plunged 10.02% to DKK3.51 after the Dutch life insurer and bank reported results that missed analysts’ estimates.

Vestas Wind Systems A/S slumped 4.84% to DKK226.30 after the wind-turbine maker was downgraded to “hold” from “buy” at NordLB.

Natixis SA climbed 0.16% to €4.26.