European Indexes Fall Ahead of Portugal, Spain, Italy Debt Sale

Arthi Gupta
10 Jan, 2011
New York City

The European indexes declined as investors focused on the sovereign debt issues. However, euro area investor sentiment improved in January. German manufacturing sector turnover eased and French industrial production climbed in November. The Greek budget deficit decreased.

[R]4:00 PM Frankfurt – The European indexes declined as investors focused on the sovereign debt issues. However, euro area investor sentiment improved in January. German manufacturing sector turnover eased and French industrial production climbed in November. The Greek budget deficit decreased.[/R]

U.S. stock futures and Asian markets fell on worries of sovereign debt fears. Portugal, Spain and Italy are scheduled to sell bonds this week. Merger activities also played in the trading sentiment after Danisco soared more than 25% on the offer from DuPont for $5.8 billon.

BP Plc stopped production at its Trans-Alaska pipeline after it found a leak.

Growth in emerging economies picked up between October and December on the back of a rebound in manufacturing, a new survey showed on Monday.

The Markit-HSBC Emerging Markets Index rose to 55.7 from 54.2 in the September quarter.

In Paris CAC 40 Index declined 54.86 or 1.42% to close at 3,810.72 and in Frankfurt DAX Index edged lower 67.86 or 0.98% to close at 6,879.98.

OECD Composite Leading Index Up

The Organization for Economic Cooperation and Development said that its composite leading index for member nations rose in November.

The composite leading index for the OECD area rose to 102.8 in November from 102.6 in October. Similarly, the index for major seven nations climbed to 103 in November from 102.7 in October.

The CLI for major five Asian nations - China, India, Indonesia, Japan and Korea rose to 101.7 from 101.5.

Euro-zone Recovery Forecasted to Slow

Slowdown in world trade as well as flagging growth in household demand due to spending cuts are likely to moderate the pace of euro-zone's recovery, data released jointly by French statistics office INSEE and Ifo economic institute showed on Friday.

The institutes estimated GDP increase of 0.4% on a quarterly basis in the third quarter and forecasted to increase 0.3% sequentially in both the first quarter and second quarter of this year. Annual GDP growth in 2010 is estimated at 1.7%, the report said.

Euro Area Investor Sentiment Improves

Euro-zone investor confidence rose in the first month of 2011, reflecting improvements in both current conditions and expectations indexes.

An indicator of investor sentiment rose to 10.6 in January from 9.7 in December, latest survey data from Sentix showed today.

The survey of around 900 investors found that current situation index rose to 14 in January from 12.8 in December, and, the expectations index edged higher to 7.3 in January from 6.8 in December.

German Manufacturing Turnover Growth Eases

German manufacturing sector turnover rose by a real 0.7% in November, following a revised 4% increase in October, the Federal Statistics Office said.

Compared with the previous year, real manufacturing turnover advanced 12.5% after recording a 12.3% increase in October.

German insolvency courts reported 13,374 insolvencies in October, 2,483 of them referred to enterprises and 8,694 to consumers, data from the Federal Statistics Office.

French Industrial Production Up

French industrial production rose 2.3% on a monthly basis in November, following a 0.8% decline in October, latest data from statistics office Insee showed. On an annual basis, industrial production rose 5.3%.

Manufacturing production gained 2.2% in November, reversing a 0.9% fall in October. Compared to the same period a year ago, manufacturing output increased 4.9%.

Construction output fell 1.3% on a monthly basis in November following a 0.7% drop in October. On an annual basis, construction output decreased 3%.

Czech Jobless Rate Surges

Czech jobless rate surged to 9.6% in December from 8.6% recorded in November, data released by the Labor Ministry showed on Monday.

Swiss Retail Sales Grows

Switzerland's retail sales grew at a pace of 2.5% annually in November in real terms, as against the 3.5% growth rate registered in October, the Federal Statistics Office said on Monday.

On a monthly basis, retail sales fell by a real 1.8% in November, compared to a 1.6% increase in October, largely on the 2.5% drop in food, beverages and tobacco sales.

Denmark Inflation Rises

Denmark's consumer price measure of inflation rose to 2.8% in December from 2.6% in November, Statistics Denmark said on Monday. The increase was mainly due to higher food and non-alcoholic beverage prices.

On a monthly basis, consumer prices rose 0.1% in December.

The harmonized measure of consumer prices rose 2.8% annually in December, from the 2.5% increase in November.

Greek Industrial Production Falls

The Greek budget deficit decreased 36.5% in 2010, which was bigger than the government's target of 33.2%, according to data released from the Finance Ministry today.

Greek industrial production fell 7.6% annually in November, latest data from the Hellenic Statistics Authority showed today. A year ago, industrial production dropped 5.2%.

Manufacturing production decreased 6.5%, while electricity output fell 13.3%. Mining and quarrying output declined 3.5% and water supply output slid 1.3%.

On a monthly basis, industrial production declined 2.8% in November.

DuPont Acquires Danisco

EI DuPont de Nemours & Co. entered into an agreement for the acquisition of Denmark-based Danisco, a global enzyme and specialty food ingredients company, for $5.8 billion in cash and assumption of $500 million of Danisco net debt.

Gainers & Losers

Amsterdam Molecular Therapeutics (AMT) Holding N.V. fell 0.53% to €1.87 after the Netherlands-based company engaged in human gene therapy said that it entered into an agreement with Institut Pasteur, France, and a group of French research institutes to support clinical development of a novel gene therapy to treat Sanfilippo B. The overall manufacturing contract payment to AMT of €1.8 million.

Bulgari S.p.A. surged 3.06% to €7.92 after the Italian jewelry firm has been upgraded from “neutral” to “buy” by BofA Merrill Lynch.

Deutsche Telekom AG dropped 1.53% to €9.71 after the integrated telecom provider’s rating was cut to “underperform” from “neutral” by Credit Suisse.

Renault S.A. climbed 0.14% to €47.31 after the French car maker had a record sales year in 2010, with global sales up 14% from a year ago. The company sold 2.63 million vehicles in 2010 up from 2.31 million in 2009.

Sanofi-Aventis S.A. declined 1.75% to €48.88 after the French drugmaker announced that it is in talks with U.S. biopharmaceutical firm Genzyme Corp. over the valuation of Genzyme’s Campath drug.

Smith & Nephew plc surged 13.23% to 736.00 pence after the global medical devices company rejected a £7 billion or $10.9 billion takeover approach from Johnson & Johnson several weeks before Christmas, Sky News reported.