Berlusconi Survives Confidence Vote, Euro-zone Industrial Output Up

Arthi Gupta
14 Dec, 2010
New York City

The European indexes fell after euro area industrial production improved in October. Italian Prime Minister Silvio Berlusconi narrowly won vote of confidence. German manufacturing employment declined but investor confidence improved. French inflation remained flat in November.

[R]4:00 PM Frankfurt – The European indexes fell after euro area industrial production improved in October. Italian Prime Minister Silvio Berlusconi narrowly won vote of confidence. German manufacturing employment declined but investor confidence improved. French inflation remained flat in November.[/R]

U.S. stocks gained after upbeat economic data and Asian markets climbed, but European markets declined on speculation ahead of the FOMC meeting.

Italian Prime Minister Silvio Berlusconi won a crucial vote of confidence in the Senate where 162 lawmakers in the 309-member upper house voted in favor of the government, while 11 senators abstained from voting on Tuesday.

The Italian premier also won the motion in the Chamber of Deputies or the lower house of Parliament by 314 to 311 votes.

In Paris CAC 40 Index declined 1.45 or 0.04% to close at 3,890.92 and in Frankfurt DAX Index edged lower 11.09 or 0.16% to close at 7018.30.

S&P Lowers Belgium Credit Outlook

Standard & Poor''s on Tuesday downgraded its outlook on Belgium to negative from stable, saying the country''s political stalemate posed risks to the government''s credit standing.

Euro-zone Industrial Output Up

Euro area industrial output grew 6.9% on a yearly basis in October, compared to a 5.4% rise in September, the Eurostat said on Tuesday.

On a monthly basis, industrial output rose 0.7% in October, compared to a 0.7% fall in September.

European Online Job Opportunities Expand

Online job opportunities remain elevated in Europe and the overall hiring atmosphere across the continent is generally positive, according to a new survey from online jobs portal Monster.

The employment index remained unchanged 122 in November compared to October, but was up 22% from the same month in 2009.

Italy noted the largest jump in opportunities on a monthly basis, whilst Germany and Sweden had the sharpest annual growth.

Ifo Revises Up German Growth Forecast

Germany''s Ifo economic research institute on Tuesday revised up its growth forecast for the economy.

In its bi-annual economic forecast, the Munich-based think tank said it estimated the biggest euro-zone economy to expand 3.7% this year, much faster than the 2.1% growth tabled in June.

Thereafter, the economy is forecast to grow 2.4% next year, driven by domestic demand. That was revised up from 1.5% growth estimated previously.

German Manufacturing Employment Drops; Economic Sentiment Rises

The number of employees working in Germany''s manufacturing sector fell 0.7% or 32,900 from the same period a year ago in October, according to the statistics office Destatis today.

The German economic sentiment indicator rose to 4.3 points in December from November''s 1.8 points, according to the Mannheim-based Centre for European Economic Research or ZEW.

ZEW''s indicator that measures current economic conditions in Germany rose to 82.6 points in December from 81.5 points in November.

French Inflation Flat

French consumer price index remained at 1.6% annually in November, the same pace as in September and October, the statistics office Insee said. The consumer price index rose 0.1% on a monthly basis in November.

Swiss Economy Faces Slowdown

Switzerland''s State Secretariat for Economic Affairs, or SECO said there are mounting indications that the export development will worsen next year, resulting in an economic slowdown. However, thanks to the relative resilience of the domestic market so far, the expected slowdown should remain limited.

The federal government''s expert group forecasts a slowdown of GDP growth from 2.7% in 2010 to 1.5% in 2011.

Gainers & Losers

BT Group PLC fell 1.25% to 181.30 pence after the British telecommunications company completed the sale of a 5.5% shareholding in Tech Mahindra Ltd. to Mahindra & Mahindra Ltd. for 4.510 billion rupees or £63 million, at INR 653.6 per share. Following this sale, BT has a 24.4% shareholding in Tech Mahindra.

Deutsche Bank AG gained 0.50% to €40.26 after the German financial services firm said it received the approval from U.S. antitrust authorities for the takeover of Deutsche Postbank AG. Subsequently, the company increased its shareholding in Postbank back to 51.98%, the level achieved through the public tender offer, which had been settled on December3.

Metric Property Investments plc dropped 0.23% to 106.75 pence after the UK retail focused Real Estate Investment Trust said it completed the acquisition of Havens Head Retail Park, Milford Haven from Land Securities PLC for £14.4 million, reflecting net initial yield of 6.8%.

Norsk Hydro ASA declined 1.77% to NOK 39.44 after the supplier of casthouse products said that it expects to close the acquisition of Vale SA''s aluminum assets in the first-half of 2011.

Lanxess AG gained 0.34% to €55.73 after the Germany-based chemical company agreed to buy DSM Elastomers business from Dutch life sciences and materials sciences company Royal DSM N.V. for €310 million in cash.

Ryanair Holdings Plc decreased 1.70% to €3.77 after the low cost airline announced further cuts to its 2011 German operations which will suffer the loss of 3 million passengers and 3,000 jobs at airports in Berlin, Bremen, Dusseldorf Weeze and Frankfurt Hahn due to the new €8 tourist tax levied by Germany.