ECB Holds Rate; Renault Surges 5.7%

Arthi Gupta
07 Oct, 2010
New York City

The European indexes gained after German industrial production accelerated in August. The ECB retained key rate at 1% for the seventeenth straight month. The EU outlined future financial sector taxation plans. French trade deficit widened in August.

[R]4:00 PM Frankfurt – The European indexes gained after German industrial production accelerated in August. The ECB retained key rate at 1% for the seventeenth straight month. The EU outlined future financial sector taxation plans. French trade deficit widened in August.[/R]

U.S. stocks edged higher after weekly jobless claims fell and Asian markets traded mixed.

Hungary’s trade surplus gained in August, Czech retail sales and industrial output improved in August and Greek and Dutch CPI rose in September.

In Paris CAC 40 Index increased 23.27 or 0.62% to close at 3,788.18 and in Frankfurt DAX Index edged higher 34.86 or 0.56% to close at 6,305.59.

The European Central Bank left its key interest rate unchanged at a record low of 1% for the seventeenth straight month. The central bank also retained its interest rate on the marginal lending facility at 1.75% and that on the deposit facility at 0.25%. The ECB aims to keep inflation below, but close to 2% over the medium term.

The European Commission outlined its plans regarding the future taxation in the financial sector. At the global level, the EC supports the idea of a Financial Transactions Tax while at the EU level, the Commission recommends that a Financial Activities Tax would be the preferable option.

According to the EC, if carefully designed and implemented, the Financial Activities Tax could generate considerable revenues and help to ensure greater stability of financial markets, without posing undue risk to EU competitiveness.

The Bank of England left its key interest rate unchanged at a record low again and maintained the size of the quantitative easing at £200 billion as expected.

German industrial production rose 1.7% on a monthly basis in August, following a 0.1% rise in July, according to data released by the Federal Ministry of Economics and Technology today. Production of intermediate goods increased 1.6% and that of investment goods rose 2.6% in August.

On an annual basis, factory output grew 10.7% in August following a 10.9% rise in July.

France''s trade deficit widened for a second straight month in August, according to official data released today. The Customs Office said trade deficit increased to €4.93 billion in August from July''s revised shortfall of €4.42 billion.

Exports rose to €34.09 billion in August from July''s €33.70 billion. Imports also increased in August, to €39.03 billion from €38.12 billion in July.

Hungary recorded a trade surplus of €392 million in August, up €231 million from the same month a year ago, the Central Statistical Office said today. Exports surged 35% compared to a year ago, while imports rose 31%.

Czech retail trade including the automotive segment grew 2.8% annually in August, compared to a 1% fall in July, the Czech Statistics Office said in a report released today.

In another report, Czech industrial output climbed 12.9% annually in August, compared to a 5.3% growth in July, the Czech Statistics Office said today. On a monthly basis, industrial production increased a seasonally adjusted 1.3% in August.

Manufacturing output rose 13% annually in August, following a 4.4% growth in July. The construction output decreased 2.1% on an annual basis in August, following a 4.5% fall in July. On a monthly basis, the seasonally adjusted construction output increased 0.2% in August.

Sweden''s government payments resulted in a deficit of SEK 15.4 billion in September, the National Debt Office said today. The difference was due to higher interest payments on public debt.

For the twelve-month period up to the end of September, central government payments resulted in a deficit of SEK 31 billion. Central government debt amounted to SEK 1,082 billion at the end of September.

Dutch annual consumer price inflation increased in September, a report by the Central Bureau of Statistics showed today. The consumer price index rose 1.6% on an annual basis in September, compared to a 1.5% rise in August. Food and non-alcoholic prices increased 1.3% annually in September, while clothing and footwear prices fell 1.9%.

On a monthly basis, the CPI increased 0.6% in September, compared to a 0.2% rise in August.

Greek consumer price index rose 5.6% annually in September, as against a 5.5% rise in August. A year earlier, the CPI increased 0.7%. Food and non-alcoholic beverages prices rose 2.1% annually in September, while clothing and footwear prices increased 2.4%.

On a monthly basis, the CPI rose 1.9% in September, compared to a 0.7% fall in August. It was the first monthly increase since last May.

The Norges Bank on Wednesday proposed some measures aimed at enhancing the efficiency of the country''s money market. The central bank sent a proposal to Finance Norway saying that a defined volume of banks'' deposits in Norges Bank will bear interest at a rate equivalent to the key rate.

The central bank expects the new measure will enhance the redistribution of liquidity in the interbank market and boost activity in the shortest segment of the money market.

Gainers & Losers

Allied Irish Banks, plc slumped 4.48% to $1.28 after the commercial bank raised more than $2 billion in a public offering of 26.70 million contingent mandatorily exchangeable notes that will be exchanged for its near 22.4% shareholding in New York-based regional lender M&T Bank Corp.

Centrica Plc gained 1.12% to 325.40 pence after the integrated energy company said its British Gas division acquired a 15.96% stake in AlertMe, a UK-based company that provides home energy management services, for £5.7 million in cash.

EDAP TMS S.A. rose 1.74% to $2.34 after the developer and marketer of the Ablatherm device strengthened its sales force in Japan as a part of a strategic initiative to address the chance in one of the largest worldwide markets to treat urinary stones.

Gerresheimer AG fell 1.81% to €28.98 after the manufacturer of specialty products reported third quarter revenues, excluding the Technical Plastic Systems business, rose 9.5% to €259.4 million from €236.9 million last year. Net income generated in the quarter was €14.1 million, compared to a loss of €4.0 million in the prior year quarter. On a per share basis, net income was €0.41, compared to a loss of €0.11 in the year-ago quarter.

Renault S.A. surged 5.74% to €38.61 after the automaker said it is selling a 14.9% stake in the Class B shares of Swedish truck maker AB Volvo to institutional investors.

Royal Dutch Shell Plc edged lower 0.08% to 1,970.50 pence after the oil and gas explorer applied for a permit to drill an exploration well in the Beaufort Sea in Alaska.

Technip S.A. decreased 0.97% to €60.36 after the France-based operator of gas and oil engineering, technologies and projects said it has been awarded a lump sum engineering, procurement, fabrication, installation, commissioning and start-up contract, worth nearly $400 million, by the Khafji Joint Operations, for the Khafji Crude Related Offshore Projects.