German Business Confidence Rises; Portuguese Unions Strike

Arthi Gupta
24 Nov, 2010
New York City

The European indexes rose after German business confidence improved in November. Portuguese strike paralyzed the nation. Euro area industrial new orders fell in September.

[R]4:00 PM Frankfurt – The European indexes rose after German business confidence improved in November. Portuguese strike paralyzed the nation. Euro area industrial new orders fell in September.[/R]

U.S. and European markets climbed on better-than-expected economic data but Asian markets fell on the tensions in the Korean peninsula.

The Czech Republic consumer confidence climbed in November. Italian retail sales dipped in September.

In Paris CAC 40 Index gained 15.77 or 0.42% to close at 3,740.19 and in Frankfurt DAX Index edged higher 98.29 or 1.47% to close at 6,803.29.

Merkel Euro Fears

German Chancellor Angela Merkel said in a speech in Berlin to the Confederation of German Employers, the BDA that the euro is facing extraordinarily serious situation, following the Irish debt crisis.

Merkel said the crisis in Ireland is different from that in Greece and noted that the Irish deficit was caused by banks. They are nonetheless worrisome, she added. However, the Chancellor said Ireland''s decision to request for financial aid is positive in her view.

Svensson on Repo Rate Path

The Swedish central bank’s Deputy Governor Lars Svensson said on Wednesday that the policy board of Riksbank should consistently choose the repo rate path that best stabilizes inflation around the target and resource utilization around a normal level, regardless of GDP growth and the repo rate level.

Portuguese Protest Austerity Measures

Portuguese workers brought the country to a near standstill today as they staged a 24-hour nationwide strike in protest against the Socialist government''s austerity measures. Unions fear the government''s austerity measures may lead to job cuts and a severe squeeze in income.

UGT and CGTP, the country''s main unions have joined together for the first time in more than 20 years. Both public and private sector workers are participating in the strike, which came two days before the Portuguese parliament is to vote on an austerity budget.

The strike hit the country''s services sector, media and fuel supplies and paralyzed transportation. Hundreds of flights were canceled and ports halted operations.

In another report, Spain’s Finance Minister Elena Salgado said in an interview with Punto Radio on Wednesday that there is no risk that Spain will need an international bailout. She said austerity measures are producing results. The public sector budget deficit was around 3.45% of GDP during January to September, 42% lower than the same period last year.

Euro-zone Industrial New Orders Drop

Industrial new orders in the euro area dropped 3.8% on a monthly basis in September, following a revised 5.1% increase in August, Eurostat said on Wednesday.

New orders for non-durable consumer goods fell 1.8% and those for intermediate goods decreased 2.2% in September. Orders for capital goods declined by 2.5% and those for durable consumer goods slipped 6.3% in September.

On an annual basis, industrial new orders climbed at a slower pace of 13.5% in September compared to revised 24.7% in August.

In EU27, industrial new orders dipped 2.5% on a monthly basis and increased 13.4% on an annual basis in September.

German Business Climate Rises

The Ifo Business Climate indicator for industry and trade in Germany rose to 109.3 in November from 107.6 in October with firms turning more optimistic over future prospects. The expectations index climbed to 106.3 in November from 105.1 in October and the current conditions index rose to 112.3 in November from 110.2 in October.

Czech Consumer Confidence Climbs

The Czech Statistics Office said on Wednesday that the seasonally adjusted consumer confidence indicator rose to 90.2 in November from 88 in October. A year earlier, the confidence indicator was at 94.1.

Italian Retail Sales Dip

Italy''s retail sales declined 0.2% on a monthly basis in September following a 0.1% increase in August, according to figures released by the statistics office Istat today.

On an annual basis, retail sales rose 0.3% in September.

SAP Ordered to Pay Oracle $1.3 Billion

SAP AG, which is charged of software theft by U.S. rival Oracle Corp. has been ordered by a U.S. Federal Court to pay Oracle $1.3 billion in damages.

Oracle sued SAP in 2007 claiming its U.S.-based TomorrowNow unit, which is now defunct, made hundreds of thousands of illegal downloads and several thousand copies of Oracle''s software to avoid paying licensing fees and steal customers.

The company said it regrets the actions of TomorrowNow and it accepts liability, and have been willing to fairly compensate Oracle Corp.

SAP AG stated that it is disappointed by the jury verdict and noted that it will consider all available options.

Gainers & Losers

Firestone Diamonds plc fell 2.91% to 25.00 pence after the international diamond miner and explorer said fiscal 2010 loss narrowed 78% to £2.41 million from £10.99 million in the prior year.

H & M Hennes & Mauritz AB gained 0.78% to SEK 232.00 after the Swedish clothing company said it acquired the remaining 40% of the shares in FaBric Scandinavien AB, which runs the store chains Weekday and Monki as well as the Cheap Monday brand.

Interserve plc declined 1.29% to 192.00 pence after the UK-based building and maintenance company said its Equipment Services division agreed to buy the heavy forming and shoring assets, including related distribution centers, of CMC Construction Services, a division of CMC Steel Fabrications, Inc., which is a subsidiary of Commercial Metals Co.

Nokia Corp. slumped 4.20% to $9.57 after the Finnish handset giant said it named Jerri DeVard Executive Vice President and Chief Marketing Officer effective January 1, 2011. DeVard will join Nokia''s Group Executive Board, reporting to Niklas Savander, Executive Vice President and head of Nokia''s Markets unit.

SES WORLD SKIES gained 0.33% to €18.00 after the Dutch operator of communications spacecraft said VimpelCom signed a capacity deal to meet the growing need for business communications capabilities throughout Russia.