Iceland Lowers Key Rate; Societe Generale, Statoil Net Surges

Arthi Gupta
03 Nov, 2010
New York City

The European indexes traded sideways after OECD area inflation edged higher in September. Iceland Central Bank lowered key rate. Societe Generale net more than doubled due to lower loan-loss provisions. BMW AG lifted its full year outlook but the stock declined.

[R]4:30 PM Frankfurt – The European indexes traded sideways after OECD area inflation edged higher in September. Iceland Central Bank lowered key rate. Societe Generale net more than doubled due to lower loan-loss provisions. BMW AG lifted its full year outlook but the stock declined.[/R]

U.S. and Asian markets rose amid speculation that the Fed will announce further monetary easing measures today and Republicans making gains in mid-term elections.

Greek economic sentiment improved in October. Spanish unemployment increased but consumer confidence dipped in October. Hungary manufacturing PMI rose in October.

In Paris CAC 40 Index increased 6.53 or 0.17% to close at 3,872.25 and in Frankfurt DAX Index edged higher 6.34 or 0.10% to close at 6,660.65.

The Organization for Economic Co-operation and Development said today that consumer prices in the OECD area rose 1.7% annually in September, compared to the 1.6% increase recorded in August.

The small pickup in inflation mainly reflects higher food and energy prices, which increased 2.3% and 5.2% respectively in September, compared with 1.4% and 4.8% in August, the Paris-based think tank said.

Inflation remained stable in the United Kingdom at 3.1%, in Italy at 1.6% and in the United States at 1.1%, while consumer prices rose in the other G7 countries. Inflation was at 1.9% in Canada, 1.6% in France and 1.3% in Germany.

The OECD further stated the pace of the global economy recovery slowed since earlier this year while public debt in most OECD countries is set to reach all-time highs.

In its latest economic assessment presented ahead of the G20 Summit in Seoul, the Paris-based think tank said average GDP growth across OECD countries is expected to be between 2.5% and 3% this year, between 2% and 2.5% in 2011 and between 2.5% and 3% in 2012.

Greek economic climate index rose to 67.3 in October from 66.6 in September, survey results from the Foundation for Economic and Industrial Research showed today.

The business climate index remained broadly unchanged at 78.5 in October compared to 78.4 in September. The confidence indicator for construction industry rose to 59.7 in October from 35.5 in September.

Swiss retail sales increased a seasonally adjusted 1.7% on a monthly basis in September, the Federal Statistics Office said today. Retail sales of food, beverages and tobacco recorded an increase of 3.3% and sales of non-food articles rose 0.4% in September.

Annually, retail sales grew 3.8% in September, compared to the 2.2% growth in September last year. While sales of food, beverages and tobacco increased 2.9% compared to September last year, non-food sales rose 5.1%.

Iceland''s central bank lowered the key lending rate by 75 basis points to 5.5%. The central bank also reduced other interest rates. The deposit rate or the current account rate was slashed by 0.75 percentage points to 4%, and the maximum bid rate for 28-day certificates of deposit was reduced to 5.25%. Overnight lending rate was slashed to 7%.

According to data published by the Labor Ministry today, unemployment in Spain increased 1.7% in October to 4.09 million from September 4.02 million. Unemployment increased by 68,213 from September.

Spanish consumer confidence dropped sharply in October, as households'' assessment on current economic situation and expectations deteriorated. According to survey data released by the Instituto de Crédito Oficial on Wednesday, the consumer confidence indicator logged 67.1 in October as against 72.8 in September. That was the second consecutive fall in the index.

Hungary''s manufacturing purchasing managers'' index rose to 51.7 in October from 50.3 in September, according to the Hungarian Association of Logistics, Purchasing and Inventory Management.

The index for production advanced 1.3 percentage points to 53.6 in October, while the purchasing volume index fell 0.8 percentage point to 52.4 in October.

Gainers & Losers

Anheuser-Busch InBev NV fell 2.33% to €43.85 after the global brewer reported third quarter revenues declined 4.5% to $9.32 billion from $9.76 billion in the previous year. Profit in the quarter fell 7.7% to $1.43 billion or 90 cents per diluted share, compared to profit of $1.55 billion or $98 cents per share in the year-ago quarter.

BP plc gained 2.01% to $41.59 after the international oil company was upgraded to ‘buy’ from ‘neutral’ by Goldman Sachs.

BMW AG dropped 0.61% to €52.03 after the world''s largest luxury-car maker reported third quarter net income of €874 million and raised its full-year forecasts.

Ferrovial SA rose 0.18% to €8.37 after the infrastructure operator and industrial company agreed to sell ground handling company Swissport International AG to private equity group Pai Partners for €654 million.

Fiat S.p.A. soared 3.04% to €12.21 after auto sales dropped 40% to 38440 units in October from 63,991 units last month, the car association UNRAE said.

Nobel Biocare Holding AG climbed 1.19% to Sfr16.20 after the Swiss medical devices company reported a third quarter loss of €17.8 million or 14 cents a share.

Societe Generale SA surged 4.19% to €43.87 after the French bank reported third quarter group net income surged 110% to €896 million, from €426 million last year. Net banking income grew 5.5% to €6.3 billion from €5.97 billion in the same quarter a year ago.

Statoil ASA plunged 5.49% to NOK 122.30 after the Norway-based integrated energy company stated third quarter total revenues and other income grew 3.5% to NOK 127.4 billion from NOK 123.1 billion for the comparable period last year. Net income for the period increased 109% to NOK 13.8 billion or NOK 4.34 per share from NOK 6.6 billion or NOK 2.33 per share in the year-ago period.