European Markets Rebound; Deutsche Bank Net Down 54%

Nigel Thomas
01 Feb, 2011
New York City

European indexes rebounded sharply after the release of manufacturing index in the region. Germany also reported lowest unemployment in eighteen years and commodities prices traded higher. Deutsche Bank AG said fourth quarter net declined 54% on two acquisitions costs.

[R]4:00 PM Frankfurt – European indexes rebounded sharply after the release of manufacturing index in the region. Germany also reported lowest unemployment in eighteen years and commodities prices traded higher. Deutsche Bank AG said fourth quarter net declined 54% on two acquisitions costs.[/R]

European markets rebounded from yesterday’s decline after commodities and crude oil prices rose. The euro gained after Germany reported lowest unemployment rate since 1992 and the rating agency S&P also affirmed Spain’s debt rating.

Manufacturing index in euro zone showed expansion and the index increased to 57.3 in January from 57.1 in December according to economic data consultancy Markit Economics.

Euro-zone seasonally adjusted unemployment rate in December was 10%, unchanged compared to November and fell from 9.9% from a year ago. Unemployment compared to a year ago rose 0.43 million in the EU27 and 0.18 million in the euro area.

Separately, Germany reported unemployment declined in January as manufacturing expanded and exports revved up in the euro-zone. German government is a separate report two weeks ago estimated unemployment to fall to 7% from 7.7% in 2010.

The number of unemployed fell 13,000 to 3.14 million in January, the lowest level of unemployment in 18 years or since November 1992.

Spain debt rating of AA was affirmed by Standard & Poor’s Ratings Services and said that nation has met its 2010 deficit target of 9.3%. The agency also estimated that debt is expected to decline to 6% and economy is expected to grow at 0.7% in 2011.

U.S. indexes trade higher as markets in Asia and emerging economies face rising inflation. Asian markets generally gained and Chinese markets closed higher ahead of Lunar New Year holiday. UPS earnings rose 44% and BP reinstated dividend after three quarters.

Two separate manufacturing indexes in China indicated steady expansion and a private survey in India also showed the expansion for the 22nd month in a row. However, input prices rose at the fastest pace in China. Manufacturing expanded in euro zone and is expected to show an increase in the latest survey in the U.S. scheduled later in the day.

Stock Movers

Deutsche Bank AG net income declined 54% to 600 million euros from 1.3 billion euros a year ago quarter. The largest bank in Germany blamed the decline to acquisitions costs related to Deutsche Postbank AG and Sal. Oppenheim Group. Deutsche Bank rose 0.3% to 43.22 euros.

Infineon Technologies AG rose 3.3% to 7.95 euros after the second largest chipmaker lifted its sales outlook for the full fiscal year and reported better than expected quarterly earnings. Earnings in the quarter rose to 232 million euros from 66 million euros a year ago quarter and sales declined 2.1% in the quarter to 922 million euros.

BP Plc declined 1.3% in London trading after the oil giant reported fourth quarter adjusted earnings of $4.36 billion. BP also reinstated dividend of 7 cents a share for the quarter ending in December. The dividend rate is half the rate before the spill and was reinstated after three quarters.

Net income in the quarter increased to $5.6 billion from $4.3 billion a year ago on higher oil prices. For the year BP reported net loss of $3.7 billion and increased the charge related to Gulf of Mexico oil spill by $1 billion to $40.9 billion.

SKF AB dropped nearly 7% after the largest ball bearing maker reported fourth quarter net of 1.31 billion Swedish kroner or $205 million.

Banks in Greece soared on positive comments from Credit Suisse. National Bank of Greece SA surged 7.1% to 7.50 euros and EFG Eurobank Ergasias SA surged 8% to 4.61 euros.