German PPI Soars; BASF Lifts Outlook, Peugeot Sales Up 10%

123jump.com Staff
20 Oct, 2010
New York City

The European indexes gained after German PPI surged in September. Dutch consumer confidence unexpectedly improved in October. BASF SE lifted its 2010 sales outlook. PSA Peugeot Citro

[R]4:00 PM Frankfurt – The European indexes gained after German PPI surged in September. Dutch consumer confidence unexpectedly improved in October. BASF SE lifted its 2010 sales outlook. PSA Peugeot Citroën quarterly sales increased 10%. Xstrata agreed to invest $710 million on ferrochrome complex expansion in SA.[/R]

U.S. stocks advanced after better-than-expected earnings and Asian markets struggled after China''s surprise interest rate hike.

A string of weak economic data in the region dominated trading but stocks took direction from better than expected earnings in the region and in the U.S.

France continues to face the rising protest from government workers and students as the government push through more austerity measures. Several local reports estimated as many as one million people demonstrated in Paris and other cities.

French leading economic index rose in August and Portugal’s PPI increased in September. Greek current account deficit narrowed in August. Spain’s export growth soared in August.

In Paris CAC 40 Index increased 13.42 or 0.35% to close at 3,820.59 and in Frankfurt DAX Index edged higher 9.83 or 0.15% to close at 6,500.52.

The International Monetary Fund said today that the European Central Bank should be ready to extend its emergency stimulus measures if the economic situation warrants such a move.

""The ECB should remain ready to adjust the time horizon of its low-interest-rate policy and redeploy extraordinary monetary measures if the recovery should stall unexpectedly,"" the Washington-based lender said in its latest regional economic outlook for Europe.

The European Central Bank Vice-President Vitor Constancio said at the fifth ECB Conference on Statistics that the global scale of the financial crisis clearly illustrated that close cooperation is needed at the global level. He noted that the statistical function provides a key underpinning for the effective implementation of macro-prudential policies.

In another related news, the European Central Bank executive board member Jürgen Stark said today that more reliable and timely data are required to support the stability and growth pact and maintain credible budgetary surveillance.

Stark believes that damaged credibility may expose unexpected vulnerabilities, which could lead to a general loss of confidence in the markets.

Germany''s producer price inflation accelerated in September from the previous year, the Federal Statistics Office said today.

The producer price index rose 3.9% annually in September, compared to a 3.2% growth in August. Producer prices increased for the sixth consecutive month. The latest annual growth was mainly due to rise in prices of energy, the Destatis said.

The Conference Board leading economic indicator for France increased sharply in August, with production expectations and the yield spread making the largest positive contributions. The index increased 3.8% between February and August 2010, as against the 3.1% rise during the previous six-month period.

Dutch consumer confidence index increased to minus 10 in October from minus 14 in September, according to a report by the Central Bureau of Statistics. The confidence indicator reached its highest level since January.

Portugal''s producer prices rose 4.4% on an annual basis in September, versus a 3.9% growth in August, Statistics Portugal said today. On a monthly basis, the PPI rose 0.2% in September compared to 0.3% rise in August.

The Greek current account deficit narrowed 44.5% or €208 million in August from the previous year, according to a report released by the Bank of Greece. The current account deficit totaled €259 million in August, narrowing from the €466.9 million deficit recorded a year ago. A decrease in the trade deficit and income account deficit as well as small rise in the surplus of the services balance contributed to the sharp decline in the current account deficit.

Spanish exports growth accelerated in August after easing for two straight months, according to official figures.

Exports recorded an annual growth of 27.8% in August, followed by a 13.2% rise in July, the Ministry of Industry, Tourism and Commerce said. Imports also grew at a faster pace of 18.8% in August, after reporting 16.7% annual increase in July.

Xstrata plc, the Swiss mining company said it would invest SAR4.9 billion or $710 million, for the development of the second phase of its Lion ferrochrome complex expansion in South Africa, to increase ferrochrome capacity and reduce cost of production.

The expansion will involve the construction and commissioning of a 360,000 ton per annum capacity smelter and will increase total ferrochrome capacity to over 2.3 million tons per annum.

Gainers & Losers

BASF SE gained 1.46% to €51.38 after the chemical company raised its full-year outlook. The company forecast 2010 sales of about €63 billion and gross earnings of more than €8 billion.

Hansen Transmissions International NV slumped 16.74% to 41.88 pence after the gearbox manufacturer said the operating environment is expected to remain challenging for the last two quarters of the fiscal 2011. Further, the company adjusted its total revenue guidance, from 5% to 10% growth for the full financial year 2011, down to a revenue decrease of around 10% from the last year.

PSA Peugeot Citroën rose 1.90% to €27.94 after the car manufacturer stated quarterly sales rose 10% to €13 billion from €11.8 billion a year earlier.

Rio Tinto plc climbed 1.11% to 3,992.00 pence after the British-Australian miner approved a $3.1 billion for expansion of Pilbara iron ore capacity to support port and rail infrastructure works around Cape Lambert.

Sanofi-Aventis SA edged higher 0.06% to €49.93 after the pharmaceutical group said it obtained authorization from U.S. competition regulators for its acquisition of Genzyme Corp.

Tele2 AB rose 2.28% to SEK 143.40 after the Sweden-based telecommunications operator said third quarter net income rose 43.4% to SEK 2.51 billion, compared with net income of SEK 1.75 billion a year earlier.