Euro-zone Inflation Accelerates 2.2%, SAP Surges 6.6%

Arthi Gupta
14 Jan, 2011
New York City

The European indexes slid after euro-zone inflation crossed ECB threshold in December. Many European nations including German reported a rise in inflation. Hungarian industrial output soared in November.

[R]4:00 PM Frankfurt – The European indexes slid after euro-zone inflation crossed ECB threshold in December. Many European nations including German reported a rise in inflation. Hungarian industrial output soared in November.[/R]

U.S. stocks fell after retail sales and consumer prices rose and Asian markets traded mixed.

The People''s Bank of China on Friday raised banks'' reserve requirement ratio by 50 basis points. It was the seventh such rate hike since 2010. The last hike was on December 10. The central bank said new rates will be effective from January 20.

The European Central Bank Governing Council member Axel Weber said on Friday that euro area economic outlook has improved, but inflation risks are likely to increase.

""The economic outlook has brightened considerably,"" Weber said in a speech in Vallendar. ""Nevertheless, risks to the medium term outlook for inflation which are so far still broadly balanced could well move to the upside.""

The European Central Bank Governing Council member Erkki Liikanen reportedly said on Friday that inflation is still not a major concern. However, with December inflation figure at 2.2%, policymakers needs to be highly alerted, the Finnish central bank chief said.

In Paris CAC 40 Index declined 11.45 or 0.29% to close at 3,963.38 and in Frankfurt DAX Index edged lower 38.60 or 0.55% to close at 7,036.51. For the week, the CAC 40 Index gained 2.65%.

Euro-zone Inflation Edges Higher

Euro-zone inflation accelerated to 2.2% in December from 1.9% recorded in November, statistics office Eurostat confirmed today. On a monthly basis, consumer prices rose 0.6% in December.

The European Central Bank has an inflation target of ""below, but 2% over the medium term.""

The euro area trade balance showed a shortfall of €1.9 billion in November on a seasonally adjusted basis, compared to a surplus of €3.5 billion in the previous month, the European Union statistics office Eurostat said on Friday.

Exports grew at a pace of 0.2% on a monthly basis in November, from the 0.8% growth in October. Imports rose 4.4% in November reversing October''s 0.8% fall.

European New Car Registrations Decline

European new car registrations decreased 3.2% annually in December, following a 7.1% drop in November, the European Automobile Manufacturers'' Association said in a report on Friday.

New passenger cars sales declined 5.5% to 13,360,599 units in 2010.

German Inflation Rises

German consumer price inflation in December rose to the highest level in more than two years led by higher food and energy prices.

German inflation rose to 1.7% in December from 1.5% in November, latest estimate from the Federal Statistics Office showed today.

On a monthly basis, prices rose 1% in December, from just 0.1% increase recorded in November.

Finland Inflation Accelerates

Finnish consumer prices accelerated 2.9% annually in December, from the 2.5% rise in November, Statistics Finland reported on Friday.

On a monthly basis, prices rose 0.5% in December, faster than the 0.2% increase in November.

The average inflation rate in 2010 was 1.2%, the agency said.

Hungarian Inflation Climbs, Industrial Output Surges

Hungary''s consumer price inflation rose to 4.7% in December from 4.2% in November, according to data released by the Central Statistics Office today. Inflation was the highest since June 2010. Food and non-alcoholic prices rose 7.6% annually in December.

On a monthly basis, consumer prices grew 0.4%, slightly faster than November''s 0.3% increase. The average increase of prices was 4.9% in 2010 compared to 2009.

Hungary''s industrial production growth climbed to a three-month high of 15% annually in November from 8.3% in October, final data from the Hungarian Statistics Office showed.

The growth was revised from the 14.5% rise reported in the preliminary estimate. A year earlier, growth in output was just 1.4%.

On a monthly basis, the volume of industrial production increased a seasonally and working-day adjusted 4.3% in November, after a 0.9% fall in October. The monthly figure was left unrevised.

Swiss Producer, Import Price Index Up

Swiss producer and import price index rose 0.3% on an annual basis in December, according to official data released today. The producer price index rose 0.1% annually in December and import prices grew 0.5%.

The producer and import price index registered a 0.3% increase on a monthly basis in December. On a monthly basis, the producer price index grew 0.3% and import prices also rose at the same pace in December.

Spain’s Leading Indicator Drops

The Conference Board leading economic index for Spain dropped 1.1% to 106.6 in November from a revised 107.8 in October. The rate of decline in October was 0.4%.

The sharp fall in the indicator in November reflected very large negative contributions from the Spanish equity price index, the long-term government bond yield and the capital equipment component of industrial production, the data showed.

Italian Inflation Increases

Inflation in Italy rose to 1.9% in December from 1.7% in November, final data from the statistics office Istat showed.

Price of food and non-alcoholic beverages grew 0.8% annually, while that of alcoholic beverages and tobacco rose 2.1% in December.

Gainers & Losers

Conergy AG plunged 9.07% to €0.45 after the manufacturer of components for solar power systems said it intends as already announced, to propose a reduction of capital stock of the company in the nominal value of approximately €400 million to about €50 million. The company announced a loss of about € 190 million on the waiving of certain loan receivables towards domestic and foreign subsidiaries.

Sanofi-Aventis SA fell 1.68% to €50.93 after the multinational pharmaceutical company reportedly said that it hopes to reach a take-over deal with Genzyme Corp. for an overall price of around $76 per share.

SAP AG surged 6.64% to $54.58 after the Germany-based software company stated IFRS total revenue for the fourth quarter rose around 27% to €4.04 billion from €3.19 billion in the previous year''s fourth quarter.

For the full-year 2010, IFRS total revenue increased 17% to €12.45 billion, compared to €10.67 billion in 2009.

Technip S.A. rose 0.91% to €74.50 after the France-based operator of gas and oil engineering, technologies and projects said it was granted a contract by Chevron North America Exploration and Production for the development of the Jack & St-Malo fields, located in the Walker Ridge area of the Gulf of Mexico at a water depth of approximately 7,000 feet.