German Factory Orders Soar; European Economic Sentiment Improves

Arthi Gupta
06 Jan, 2011
New York City

The European indexes gained after German factory orders surged in November. China expressed willingness to buy

[R]4:00 PM Frankfurt – The European indexes gained after German factory orders surged in November. China expressed willingness to buy €6 billion of Spanish debt. OECD annual inflation eased in November. Euro area retail sales declined but economic sentiment improved. Swiss inflation rose in December.[/R]

European indexes traded higher as commodities gained in London trading and Asian markets retained positive bias.

China is willing to buy as much as €6 billion of Spanish debt to aid the euro-zone country''s efforts to restore financial stability, El Pais newspaper reported on Thursday.

The pledge came during Chinese vice premier Li Keqiang''s three-day visit to the country, the paper said citing government sources.

In Paris CAC 40 Index gained 27.95 or 0.72% to close at 3,932.56 and in Frankfurt DAX Index edged higher 76.29 or 1.10% to close at 7,016.11.

OECD Annual Inflation Slackens

Annual inflation in the OECD area slackened to 1.8% in November from 1.9% in October, the Organization for Economic Cooperation and Development said today. The decrease in the rate of inflation reflected slower growth in energy prices.

Excluding food and energy prices, core annual inflation rose to 1.2% in November from 1.1% in October. Food prices advanced 2.7% and energy prices 5.4% in November.

Prices rose 0.3% in the U.K., and 0.1% in Canada, France, and Germany. However, prices remained stable in the United States and Italy and fell 0.3% in Japan.

Euro Area Retail Sales Decline, Economic Sentiment Improves

Euro-zone retail sales fell 0.8% on a monthly basis in November after staying flat in October, according to data from the European Union statistics office Eurostat released today.

Annually, retail sales growth eased to 0.1% in November from 1.2% in October.

In the EU27, retail sales volume slipped 0.4% on a monthly basis, while it increased 0.8% annually in November.

Economic sentiment indicator for the euro-zone climbed to 106.2 in December from a revised 105.1 recorded in November, results of a monthly survey conducted by the European Commission showed on Thursday.

Industrial sentiment index recorded a reading of 4 in December, as against November''s revised reading of 0.7.

German Factory Orders Grow

German factory orders surged more than expected in November helped by strong overseas demand, official data showed today.

Seasonally adjusted factory orders increased 5.2% on a monthly basis in November, following the 1.6% growth in October, the Federal Ministry of Economics and Technology said.

On an annual basis, factory orders rose 20.6% in November, compared to a revised 18% increase in October.

Swiss Inflation Rises

Switzerland''s consumer price index rose 0.5% annually in December after climbing 0.2% in November, data released by the Federal Statistics Office showed on Thursday.

On a monthly basis, consumer prices were flat in December following the 0.2% increase in November.

Romania Retail Sales Drop

Romania''s retail sales, excluding sales of automobiles, fell 3.1% on a monthly basis in November, the National Institute of Statistics said.

However, sales of food, beverages and tobacco rose 1.4% while that of food products decreased 0.3% in November.

Annually, retail sales dipped 7% in November largely due to 13.4% slump in non-food sales.

Dutch CPI Up

Dutch consumer price inflation rose to 1.9% in December from 1.6% recorded in November, the Central Bureau of Statistics said and the highest since March 2009.

According to the statistics office the increase in inflation was mainly due to higher prices of motor fuels.

On a monthly basis, consumer prices fell 0.2% in December.

Denmark Jobless Rate Remains Flat

Denmark''s seasonally adjusted unemployment rate remained at 4.2% in November, unchanged from October, Statistics Denmark said today. The number of unemployed persons fell to a seasonally adjusted 113,500 in November from 114,200 in October.

Gainers & Losers

KBC Groep NV fell 2.12% to €26.10 after the bancassurer in Belgium said that its underlying results in the fourth quarter of 2010 will be influenced by increased provisioning for the Irish loan book and an isolated case of irregularities at KBC Lease UK.

Lagardere SCA soared 5.52% to €34.82 after the media group has been upgraded from “neutral” to “buy” by Goldman Sachs.

Prysmian S.p.A. surged 5.86% to €13.73 after the Italian cable maker said its cash-and-stock takeover offer for Dutch peer Draka Holding NV will start Thursday and end February 3.

PSA Peugeot Citroen S.A. increased 3.13% to €31.31 after the car maker’s chief executive officer, Philippe Varin, told reporters in Paris that the company sold about 3.6 million light vehicles in 2010, a record number for the group.

TAG Immobilien AG declined 0.95% to €6.46 after the Germany-based property company said shareholders of Colonia Real Estate AG have tendered their shares to TAG in connection with the voluntary public takeover bid.

Vivalis SA rose 2.81% to €7.69 after the French vaccine maker said it initiated a second discovery program for human monoclonal antibodies as part of an agreement signed with Sanofi Pasteur, the vaccines division of Sanofi-Aventis Group.

Volkswagen AG climbed 1.16% to €113.30 after the Germany-based automobile manufacturer’s U.S. head, Jonathan Browning, said in an interview that sales are likely to increase on higher sales of SUVs.