European Indexes Soar; French Inflation Accelerates

Arthi Gupta
13 Oct, 2010
New York City

The European indexes soared after euro-zone industrial production rose 1% in August and U.S. stocks climbed. French consumer prices fell unexpectedly and inflation accelerated in September. Greek import price inflation slowed in August.

[R]4:00 PM Frankfurt – The European indexes soared after euro-zone industrial production rose 1% in August and U.S. stocks climbed. French consumer prices fell unexpectedly and inflation accelerated in September. Greek import price inflation slowed in August.[/R]

U.S. stocks climbed after upbeat earnings from Intel and JPMorgan and Asian markets rose on Fed comments.

Portugal CPI remained flat at 1.9% in September.

In Paris CAC 40 Index increased 67.22 or 1.79% to close at 3,816.08 and in Frankfurt DAX Index edged higher 110.11 or 1.75% to close at 6,414.68.

Bundesbank President Axel Weber said on Tuesday that the European Central Bank should phase out the securities markets program as the risks associated with the program outweigh its benefits.

Weber said in his keynote speech at the Shadow Open Market Committee symposium in New York that exiting expansionary monetary policy too late is riskier than exiting earlier. He also noted that there is no evidence that asset purchases have had any significant impact on average euro-area sovereign bond yields on which euro-area monetary policy must exclusively focus as its main transmission channel.

Euro-zone industrial production rose 1% on a monthly basis in August following a revised growth of 0.1% in July, Eurostat said today. Durable consumer goods rose 1.8%, while non-durable consumer goods production fell 0.2% in August.

On an annual basis, euro area industrial output growth accelerated to 7.9% in August from a revised 7.2% in July.

Industrial production in EU27 increased 0.8% on a monthly basis in August, taking the annual growth to 7.5%.

French consumer prices dropped 0.1% in September, following an increase of 0.2% in August, the French statistics office Insee said today.

French annual inflation accelerated in September on higher energy and food prices, according to official figures released today.

EU harmonized annual inflation rose to 1.8% in September, from 1.6% in August, the French statistics office Insee said.

The Hellenic Statistics Authority said today that import price inflation in Greece rose 4.6% annually in August, slower than the 6% increase in July. On a monthly basis, the overall import price index grew 0.4% in August after declining 0.7% in July.

Portugal''s consumer prices remained unchanged in September from the previous month, a report by the Statistics Portugal showed on Wednesday.

The consumer price index rose 1.9% on a yearly basis in September, same as in August. On a monthly basis, the CPI increased 0.2% in September, compared to a 0.2% fall in August.

Swedish inflation and economic growth expectations for the next one year were unchanged from September, according to a survey of key business and financial groups.

The TNS SIFO Prospera survey showed inflation in the one-year time will be 1.6% and the economy would grow 3%. In the next two-year time, inflation would move to 2.1%, a notch higher than the 2% estimated in the previous survey. However, growth expectations for the next 24 months were unchanged at 2.8%.

Gainers & Losers

ASML Holding N.V. soared 4.30% to €23.03 after the provider of lithography systems for the semiconductor industry reported third quarter net sales more than doubled 112.5% to €1.18 billion from €555.3 million in the same quarter a year ago. Net income in the quarter surged 1,256% to €268.5 million or 0.61 euros per share from €19.8 million or 0.04 euros per share in the prior year.

Fresnillo plc climbed 2.34% to 1,270.00 pence after the Mexican-based precious metals miner reported that its attributable silver production for the third quarter edged up 1.1% and gold production surged around 44% from last year, both to record new levels. The company also said it remains on track to achieve full-year production target.

L''Oreal SA gained 2.37% to €83.49 after the French cosmetics company is preparing to make a cash offer of more than $44 per share for Avon Products Inc., or about $19 billion according to a report published in UK based Daily Mail.

Obtala Resources Plc increased 1.70% to 44.75 pence after the company focused on investing in and developing natural resource assets raised £4.9m by selling its entire holding of 22.65 million ordinary shares in AIM-quoted Firestone Diamonds Plc.

Standard Chartered Plc fell 2.72% to 1,856.50 pence after the UK-based lender is planning to launch a rights issue to raise £5 billion to £7 billion, or $7.91 billion to $11.08 billion, as part of the company''s efforts to protect itself from the impact of the new Basel III capital rules, the Financial Times reported on Tuesday.