Europe Indexes Rise on Retail Sales, Services

Arthi Gupta
03 Sep, 2010
New York City

The European indexes advanced after euro area retail sales climbed in July and service sector growth rose to a three-month high in August. Novartis discovered compound for treatment of drug-resistant malaria. Carnegie acquired HQ Bank and HQ Fonder.

[R]4:00 PM Frankfurt – The European indexes advanced after euro area retail sales climbed in July and service sector growth rose to a three-month high in August. Novartis discovered compound for treatment of drug-resistant malaria. Carnegie acquired HQ Bank and HQ Fonder.[/R]

U.S. and Asian markets traded higher.

The ECB President Trichet reiterated interest rate is “appropriate.” Across the Europe service sector indicated mixed picture reflecting the strength of manufacturing exports in each country. Retail sales in the region increased from a year ago in July.

German services sector growth accelerated but French service sector activity slid to a four-month low in August. Italian service sector growth rose in August and Spanish services activity deteriorated in August. Iceland GDP contracted in the second quarter.

In Paris CAC 40 Index increased 67.54 or 1.86% to close at 3,698.97 and in Frankfurt DAX Index edged higher 83.63 or 1.37% to close at 6,167.48.

The European Central Bank President Jean-Claude Trichet reiterated on Thursday that euro-zone interest rates remain appropriate. Speaking at the press conference, Trichet said price developments are expected to remain moderate over the medium-term, benefiting from low domestic price pressures.

In addition, the Governing Council decided to continue its emergency lending measures for banks, Trichet said.

Euro-zone retail sales rose 1.1% year-on-year in July compared to the 1.2% increase in June, according to the official figures released from Eurostat today.

Sales of food, drinks & tobacco increased 1.4%, while revenue in the non-food sector climbed 1.8%. On a month-over-month basis, sales edged higher 0.1% in July as against the 0.2% growth in June.

In the EU, retail sales climbed 1% on a yearly basis and 0.1% on a monthly basis.

Euro-zone service sector activity rose to a three-month high in August, led by strong growth in Germany and France, according to new survey data released today.

Markit Economics said the services purchasing managers'' index rose to a seasonally adjusted 55.9 in August from 55.8 in July.

New work received by euro-zone service providers rose at a rate that was the fastest in four months in August.

German services sector grew at the fastest pace in three years in August, according to final data released from Markit Economics today. The latest data indicated that the upturn in German service sector activity continued for the thirteenth consecutive month and the growth in August was supported by a solid rise in incoming new work.

The final Services Business Activity Index declined to 57.2 in August compared to 56.5 in July. The final Composite Output Index fell to 58.4 in August from 59 in July.

Markit Economics said today that French service sector activity dropped to a four-month low in August. The purchasing managers’ index for services decreased to 60.4 in August from 61.1 in July.

The Composite Output Index edged lower to 59.5 in August, down from 59.7 in July.

Italy''s service sector growth improved in August following a contraction in the previous month, as new business levels increased and more jobs were created.

The Markit/ADACI Purchasing Managers'' Index for the service sector rose to 51.4 in August from 49.6 in July, Markit Economics said today.

Operating conditions across Spanish service sector deteriorated in August along with a decline in both business activity and new work, according to a survey report released by Markit Economics today.

The headline seasonally adjusted Business Activity Index dropped to 49.2 in August from 51.3 in July.

Iceland''s gross domestic product decreased 3.1% on a sequential basis in the second quarter, compared to a 1.2% fall in the previous quarter, the Statistics Iceland said today. On an annual basis, the GDP decreased 8.4% in the second quarter, compared to a 7.3% fall n the March quarter.

Novartis AG announced that scientists at the company have discovered a compound that shows promise as a next generation treatment for drug resistant malaria and shows pharmacological properties compatible with a once-daily dosing regimen.

The Carnegie group acquired all shares in HQ Bank AB and HQ Fonder Sverige AB.

Carnegie acquired all issued shares in HQ Bank from HQ AB, Investment AB Öresund, Johan Qviberg, Anna Qviberg and Jacob Qviberg for SEK 268 million, which corresponds to the amount of HQ Bank''s outstanding personnel convertibles.

Carnegie also acquired all issued shares in HQ Fonder from Öresund. Payment amounts to a total equivalent of SEK 850 million.

Both transactions have been approved by the Swedish Financial Supervisory Authority.

Gainers & Losers

Natixis SA gained 0.70% to €4.44 after the investment group announced a reshuffle of its senior management team.

Neopost S.A. rose 2.78% to €57.21 after the mailing and logistics solutions provider said second quarter sales rose 6.9% to €243.9 million from a year-earlier.

Theolia SA slumped 8.1% to €1.47 after the French wind-power company reported first-half net loss widened 72% to €24.2 million compared to net loss of €14.1 million a year earlier.

Vinci S.A. increased 2.15% to €37.54 after the builder’s Vinci Park finalized the acquisition of a 100% stake in Meteor Parking company in the UK.