Euro, European Markets Rebound; Manufacturing, Retail Sales Rise

Arthi Gupta
01 Dec, 2010
New York City

Indexes in European region rose sharply after Portugal completed the sale of Treasury bills. The sentiment improved after positive comments from the ECB officials. Euro area manufacturing activities improved in November and German retail sales rose in October.

[R]4:00 PM Frankfurt – Indexes in European region rose sharply after Portugal completed the sale of Treasury bills. The sentiment improved after positive comments from the ECB officials. Euro area manufacturing activities improved in November and German retail sales rose in October.[/R]

European markets closed sharply higher after Portugal completed the sale of Treasury bills, though at a higher rate but attracted bids and more than two times the offering. Euro zone manufacturing improved, France reported a rising business activities and Germany retail sales rose.

The Portuguese debt management agency completed the sale of €500 million or $654 million of 12-month Treasury bills at an average yield of 5.281%, up from 4.81% yield in November.

However, Standard & Poor’s warned that it was putting Portuguese debt on a watch list for a possible downgrade.

In Paris CAC 40 Index surged 50.74 or 1.41% to close at 3,661.18 and in Frankfurt DAX Index soared 150.56 or 2.25% to close at 6,839.05.

Swedish PMI slackened in November and current account surplus narrowed in the third quarter.

Euro-zone Manufacturing PMI Improves

Euro-zone manufacturing activity improved to a four-month high in November, the Markit Economics said on Wednesday.

The Final Purchasing Managers'' Index rose to 55.3 in November from 54.6 in October, but below the earlier flash estimate of 55.5.

German Retail Sales Climb; Manufacturing PMI Rises

German retail sales increased a seasonally and calendar adjusted 2.3% in real terms in October, compared to a revised 1.8% fall in September, the Federal Statistics Office said.

Annually, retail turnover decreased 0.7% in October, compared to a 0.9% growth in September, revised from a 0.4% rise estimated initially.

German manufacturing purchasing managers'' index rose to a three-month high of 58.1 in November from 56.6 in October, Markit Economics said on Wednesday.

The increase in the headline PMI reflected stronger positive contributions from the output, new orders and employment components in November, Markit said.

French Manufacturing PMI Rises

French purchasing managers'' index for the manufacturing sector rose to 57.9 in November from 55.2 in October, a final report by the Markit Economics showed on Wednesday, the highest in over ten years. The latest reading was revised from 57.5 reported in the flash estimate.

The new orders increased to the biggest level since August 2000 and the growth of new export orders accelerated to the strongest for six months, the Markit said.

Swedish PMI Falls; Current Account Surplus Narrows

Swedbank and Swedish National Association of Purchasing and Logistics said the Purchasing Managers'' Index fell to 61.3 in November from 61.8 in October. The index for new orders fell to 60.4 in November from 63 in October. There was a marked fall in new export orders, while orders from domestic market also declined.

The index for production rose to 64.2 in November from 63.5 in October.

Swedish current account surplus sharply narrowed to SEK 50.3 billion in the third quarter from SEK 55.4 billion in the second quarter, according to data from the Statistics Sweden published today. That was also down from SEK 51 billion surplus recorded a year ago.

Spain Manufacturing PMI Drops

Spanish purchasing managers'' index declined to 50 in November from 51.2 in October, according to a report by the Markit Economics. This was only due to a sharp lengthening of supplier delivery times and declines in new orders, output, employment and stocks of purchases, the survey showed.

Gainers & Losers

Cap Gemini SA gained 0.66% to €32.71.

Eurand N.V. fell 2.32% to $10.97 after the Dutch specialty pharmaceutical company announced on Wednesday a deal to be acquired by privately held Axcan Holdings, Inc. for about $583 million in cash. The transaction is expected to close in the second quarter of 2011.

Novartis AG declined 2.14% to $53.41 after the Swiss healthcare giant announced that it will trim about 8% of the workforce at its U.S. subsidiary Novartis Pharmaceuticals Corp. as part of the restructuring of U.S. field workforce to reflect the changing product portfolio and to align resources with “strategic growth priorities.”

Rio Tinto Plc surged 3.31% to 4,214.50 pence after the miner announced that it approved an additional $1.2 billion investment in its drive to lift annual iron ore production capacity in Western Australia''s Pilbara region to 283 million tons per annum.

Western & Oriental plc slumped 16.67% to 1.50 pence after the luxury travel group reported fiscal year 2010 revenue declined 13% to £46.72 million from £53.45 million a year ago. Net loss in the period widened 1439% to £11.62 million or 3.96 pence per share, as against a net loss of £755,000 or 0.33 pence per share last year.