German Confidence Gains; Stocks Up

Arthi Gupta
24 Sep, 2010
New York City

The European indexes advanced after German business confidence rose to record level in September. Euro-zone money market turnover fell in the second quarter. France GDP growth revised up 0.7% in the second quarter. The Swiss National Bank lifted current year Swiss growth forecast to 2.5%.

[R]4:00 PM Frankfurt – The European indexes advanced after German business confidence rose to record level in September. Euro-zone money market turnover fell in the second quarter. France GDP growth revised up 0.7% in the second quarter. The Swiss National Bank lifted current year Swiss growth forecast to 2.5%.[/R]

U.S. stocks traded higher and Asian stocks fell with the markets in China region were closed today.

European commercial vehicle registrations rose in August. German import price inflation slackened in August and Spain’s PPI slowed in August. Greek trade deficit narrowed in July.

The European Commission President Jose Manuel Barroso said on Thursday the debt problems of some euro-zone states are ""exaggerated"" and expressed confidence that Europe will come through the crisis with a strict continent-wide austerity regime.

""The European banking sector is healthy - the idea that the banking sector is not healthy is completely wrong,"" he said.

The French Banking Federation said the levies announced by the government on banks operating in France are ""unjustified"" and ""harmful for the economy.""

Norway Central Bank Governor Svein Gjedrem said today almost all European countries and several other economies are embarking on fiscal tightening and simultaneous spending cuts may be a threat to export growth.

In Paris CAC 40 Index gained 36.54 or 0.98% to close at 3,747.15 and in Frankfurt DAX Index edged higher 56.29 or 0.91% to close at 6,241.00.

The European Central Bank in a new survey released today said turnover in the euro-zone money market fell for the third straight year.

Aggregate turnover fell 3% between April and June compared to the same period a year ago, following a 5% decline in the June quarter of 2009. The secured market remained the largest segment, with its aggregate turnover increasing 8%.

New registrations for commercial vehicles in the European Union increased 5.4% in July and 10.1% in August, with growth in all segments except buses and coaches, the European Automobile Manufacturers'' Association said in a report today.

Data showed that new commercial vehicle registrations totaled 1.12 million units during eight months to August, or 4.9% more than over the same period a year ago.

German business sentiment improved unexpectedly in September to the highest level since June 2007. The business sentiment index rose slightly to 106.8 in September from 106.7 in August, according to a monthly survey conducted among 7,000 firms by the Ifo institute.

The current situation index climbed more than expected to 109.7 in September from 108.2 in August.

Germany''s annual import price index rose 8.6% in August compared to 9.9% in July. Import prices increased for the eighth consecutive month. A year earlier, import prices were down 11.4%.

On a monthly basis, import prices grew 0.2% in August, compared to a 0.2% fall in July.

The French economy grew at a faster pace than previously estimated between April and June, official figures showed today.

Statistics office Insee said gross domestic product rose 0.7% between April and June compared to three months earlier, slightly better than the 0.6% expansion estimated earlier and higher than the 0.2% rise in the first quarter.

Spanish producer prices rose 2.7% in August on a yearly basis after increasing 3.3% in July, according to data released from the statistics office INE today. On a monthly basis, producer prices rose 0.1% in August reversing July''s 0.1% fall.

Consumer goods prices remained flat in August from the prior year, following a 0.3% rise in July. Non-durable consumer goods prices declined 0.1% in August.

Greece''s trade deficit including the oil products for July narrowed to €1.51 billion compared to €2.89 billion last year, the Hellenic Statistics Authority said. Excluding oil products, the trade gap was €1.47 billion versus €2.33 billion a year ago.

During the seven-month period between January and July, the country recorded a trade deficit of €12.42 billion compared to €17.92 billion last year.

The Swiss National Bank raised its 2010 growth estimate for the Swiss economy to 2.5% from 2%. The bank said in its latest quarterly bulletin that the Swiss economy is likely to grow at a markedly slower pace in the second half of the year as the Swiss franc rises in value.

The UK-based lender HSBC Holdings plc''s Chief Executive Michael Geoghegan is set to step down at the year end. Geoghegan is expected to be succeeded by Stuart Gulliver, the Head of HSBC''s investment bank.

Gainers & Losers

BNP Paribas SA gained 1.95% to €54.95 after the France-based bank group was downgraded to ‘equal-weight’ from ‘overweight’ by Morgan Stanley.

European Aeronautic Defence and Space Company N.V rose 2.86% to €19.08 after the Dutch company specialized in the aerospace, defense and related services was upgraded to ‘overweight’ from ‘neutral’ at J.P. Morgan Cazenove.

GlaxoSmithKline plc advanced 1.24% to $39.92 after the healthcare group informed that the European Medicines Agency suspended the marketing authorization for its diabetes drug Avandia or rosiglitazone maleate.

Merck KGaA slumped 9.29% to €63.66 after the German drug company’s Cladribine tablets for treating relapsing-remitting multiple sclerosis was not recommended by the European Medicines Agency based on the conclusion that the benefits of the drug didn’t outweigh the risks.

Novartis AG increased 0.27% to $56.32 after the Swiss drugmaker signed an agreement to sell to Warner Chilcott plc the U.S. rights to market Enablex extended release tablets, a medicine to treat adults with symptoms of overactive bladder.

Siemens AG edged higher 2.29% to €78.20 after the German industrial conglomerate said one of its units signed a pact to acquire U.S.-based Republic Intelligent Transportation Services Inc. for an undisclosed sum.