Indexes in Europe Close Higher; Hermes, Deutsche Post, Munich Re Up

Bikram Pandey
09 Nov, 2010
New York City

Market indexes in Europe closed higher as the dollar declined and earnings lifted the sentiment. Munich Re lifted its earnings estimate and Hermes SCA and Deutsche Post reported better than expected earnings.

[R]5:00 PM Frankfurt – Market indexes in Europe closed higher as the dollar declined and earnings lifted the sentiment. Munich Re lifted its earnings estimate and Hermes SCA and Deutsche Post reported better than expected earnings.[/R]

The DAX Index increased 0.7% or 49.89 to 6,800.39 and CAC-40 index added 1.05% or 41.01 to 3,954.71. The benchmark index in Spain rose 1.4% and Milan surged 1.8%.

The UK trade deficit in goods and services decreased to £4.6 billion in September, compared to deficit of £4.9 billion in August. The goods deficit decreased to £8.2 billion in September compared to £8.5 billion in August. Exports rose £0.5 billion and imports rose £0.4 billion.

The Warsaw Stock Exchange on the first day of trading surged as much as 23% after Poland sold 64% stake in the country’s sole exchange. The public offering raised 1.2 billion zloty or $420 million that valued each share at 44 zloty. The stock traded as high as 52.89 zloty.

The Warsaw Exchange has benefited from the rising trading volume and new listings in the last three years. Daily turnover has tripled in the last decade and number companies listed steadily increased in the last three years.

The Warsaw Exchange is the third largest exchange in the Eastern Europe region with a market capitalization of $198 million, followed by Russia and Turkey.

The public offering is not cheap when measured in earnings. The fast growing exchange is valued at more than nineteen times 2010 earnings, significantly ahead of developed markets exchange valuations.

Munich Re third quarter net income increased to 764 million euros from 643 million and lifted the full year earnings. The reinsurance company said net income attributable to shareholders for the year 2010 is expected 2.4 billion from the 1.6 billion in the nine months period.

Stock Movers

Adecco SA increased 4.4% to Sfr61.10 after staffing services provider based in Switzerland quarterly net increased 42% to 128 million euros on the acquisition in the U.S.

Barclays increased less than 3% to 293.10 pence after it reported quarter net plunged 76%. The UK based lender said its Core Tier 1 ratio was unchanged at 10%.

Carlsberg A/S declined 4.5% to DKK566.10 after the beer brewer reported third quarter earnings of DKK1.95 billion or $365 million. The company also said its comparable revenues excluding acquisitions and business disposition increased 2%.

Corio NV declined 4% to 48.34 euros after Algemene Pensioen Groep NV hired JP Morgan Chase to sell 4.5 million shares at 48 euros each.

Deutsche Post AG increased 3.3% to 13.50 euros after the international parcel carrier reported quarterly net income increased to 226 million euros on a rise in international shipments.

Groupe Danone SA increased nearly 2% to 47.25 euros on the media speculation that Japan based companies may acquire its bottled water business including Evian brand.

Hermes SCA soared 7% to 165.10 euros after the luxury goods maker said third quarter sales increased 31% to 590.1 million euros from 452.1 million euros a year ago. Hermes also lifted its full year outlook and said sales will increase 15% in constant currency and on the expectations of solid fourth quarter sales.

Munich Re declined 2.5% to 112.45 euros after it reported earnings.

Swisscom gained 2.1% to Sfr420 after the Swiss telecom carrier reported third quarter net income of Sfr536 million.