Norway Holds Rate; European Stocks Fall

Arthi Gupta
22 Sep, 2010
New York City

The European indexes slid after euro-zone industrial orders fell more than expected in July. Norway retained key interest rate at 2%. German economic index rose in July and real wage growth accelerated in the second quarter. Hungary retail sales increased in July.

[R]4:00 PM Frankfurt – The European indexes slid after euro-zone industrial orders fell more than expected in July. Norway retained key interest rate at 2%. German economic index rose in July and real wage growth accelerated in the second quarter. Hungary retail sales increased in July.[/R]

In Paris CAC 40 Index decreased 12.64 or 0.33 to close at 3,771.26 and in Frankfurt DAX Index edged lower 17.23 or 0.27% to close at 6,258.75.

New industrial orders received by euro area manufacturers fell at a sharper than expected pace in July, according to official figures released today.

Eurostat said new orders fell 2.4% in July compared with the 2.4% growth in June. Factory orders fell 0.6% in July and orders for capital goods slumped 5.1%, and for durable goods declined 3.2% in July.

New orders across the European Union decreased 2.3% in July after a rise of 2.5% in June. On a yearly basis, the EU27 orders rose 12.5%.

Central bank in Norway retained its key policy rate at 2%, citing low inflation, well below the bank''s 2.5% target in August. Annual inflation in Norway was 1.9% in August, unchanged from July.

Norges Bank Deputy Governor Jan F. Qvigstad said that ""activity is increasing in the Norwegian economy, although there is still some margin of spare capacity.""

According to another report, Norway''s unemployment rate was 3.3% in July, a decline of 0.3 percentage points since April, data from Statistics Norway showed today. July''s unemployment rate is the average of June to August numbers and April rate represents average of March to May.

The Conference Board Leading Economic Index for Germany increased 1.0% in July, following a 0.5% gain in June. Five of the seven components of the index increased in July, led by consumer confidence, yield spread, and inventory.

At the same time, The Conference Board Coincident Economic Index for Germany, a measure of current economic activity, declined 0.1% in July, as a result of falling manufacturing sales and retail trade following a 0.1% increase in June.

German real earnings rose by an average 2.3% in the second quarter from the prior year, the Federal Statistics Office said in a report released today. This was bigger than the 0.8% growth seen in the first quarter. The second quarter increase was the highest since 2007, the statistics office said.

Data showed gross monthly earnings in transportation and storage dipped 0.4% from the second quarter of 2009. In all other industries, the earnings increased from the previous year.

Hungary''s retail sales increased in July from the previous month, according to a report release by the Hungarian Central Statistics Office today.

Retail sales increased a seasonally and calendar adjusted 1% on a monthly basis in July, compared to a 0.1% fall in June. Retail trade in food, beverages and tobacco rose 0.7%, after a 0.2% rise in June.

On an annual basis, retail sales volume grew 1.7% in July, compared to a 4.6% drop recorded in June. Retail trade in food, beverages and tobacco rose 1.1%. The volume of retail sales increased for the first time since March 2007, the statistics office said.

Novartis AG, the Swiss drugmaker announced that its oral multiple sclerosis treatment Gilenya 0.5 mg daily, a first-line treatment for relapsing forms of multiple sclerosis, has been approved by the FDA.

According to Novartis, Gilenya showed superior efficacy by reducing relapses by 52% at one year compared with interferon beta-1a IM, a commonly prescribed treatment for MS (multiple sclerosis).

Italian authorities have launched an investigation against Vatican Bank Chairman Ettore Gotti Tedeschi and Director-General Paolo Cipriani to determine whether they violated European Union money-laundering rules.

Gainers & Losers

France Telecom S.A. dropped 1.74% to €16.13 after the telecom operator said it is buying a 40% stake in Morocco''s No. 2 telecom operator Meditelecom SA for €640 million.

Sanofi-Aventis S.A. rose 1.20% to $33.74 after the drugmaker announced that its ischaemia drug failed in a late-stage study.

UniCredit S.p.A. dropped 2.69% to €1.85 after the Italian bank announced the resignation of its Chief Executive Officer Alessandro Profumo, who has been at the helm of the company since 1997.

Xstrata Plc surged 3.21% to 1,205.00 pence after the diversified mining company said it successfully closed $4 billion multi-currency revolving credit facility.

Zeltia SA plunged 4.06% to €3.42 after the Spanish drugmaker cut its forecast for its group sales in 2010 by 10% to 20%.