Euro Area Inflation at 2.3%; Bayer Swings to Loss

Arthi Gupta
28 Feb, 2011
New York City

The European indexes rose as oil prices stabilized but tensions in the Middle East remained high. Euro area inflation rose 2.3% in January and German import price inflation slowed and French producer price inflation slackened. Swedish retail sales growth and producer prices dropped in the month.

[R]4:00 PM Frankfurt – The European indexes rose as oil prices stabilized but tensions in the Middle East remained high Euro area inflation rose 2.3% in January and German import price inflation slowed and French producer price inflation slackened. Swedish retail sales growth and producer prices dropped in the month.[/R]

Oil prices increased again amid continuing turmoil in Libya and the spread of protests to the Gulf state of Oman, which accounts for about 1% of global production.

Riksbank Deputy Governors Karolina Ekholm and Lars Svensson were against the decision to raise the repo rate by 25 basis points to 1.5% on February 14, the minutes of the meeting released today showed. Both policymakers advocated a repo-rate path that then gradually rises to 3.25% by the end of the forecast period.

In Paris CAC 40 Index gained 44.64 or 1.10% to close at 4,115.02 and in Frankfurt DAX Index edged higher 94.13 or 1.31% to close at 7,279.30.

Euro-zone Inflation Rises

Euro-zone consumer price index rose 2.3% annually in January following the 2.2% increase in December final data from the Eurostat showed. The current inflation rate is the highest since October 2008.

In January, energy prices increased 12% annually, and food prices rose 1.5%. Alcohol and tobacco prices increased 3.7%.

On a monthly basis, consumer prices fell 0.7%, the official report showed.

German Import Price Inflation Eases

Germany''s import price inflation eased to 11.8% in January from 12% in December, the Federal Statistical Office said today. On a monthly basis, import prices rose 1.5% in January compared to the 2.3% rise in December.

The sharpest increase in import prices was recorded in crude oil, costs of which soared 33.2% annually.

Export prices increased 5.4% annually in January compared to 5.2% rise in December. On a monthly basis, export prices rose 0.8% in January, at the same pace as in December.

French PPI Slackens

French factory gate inflation eased to 5.2% in January from 5.4% in December, data from the statistics office Insee showed on Monday. On a monthly basis, producer prices grew 0.8% in January.

Hungary Jobless Rate Rises

Hungary''s jobless rate rose to 11.2% in the period November 2010 to January 2011 from 10.8% recorded in October 2010 to December 2010, the statistics office said on Monday.

Spanish HICP Inflation Up

Spanish inflation based on the harmonized index of consumer prices rose to 3.4% in February from 3% in January, the statistics office INE said on Monday. The latest inflation figure is the highest since September 2008, when it was 4.6%.

Dutch Factory Price Inflation Surges

Dutch producer price inflation rose to 11.2% in January from 10.8% in December, Statistics Netherlands said on Monday. The rate accelerated for the fifth month in a row from 7.6% in August last year.

Prices rose in all branches of manufacturing, the agency said, with petroleum refineries showing the biggest increase of nearly 27%.

Danish GDP Contracts

Denmark''s economy shrank in the fourth quarter as the gross domestic product declined 0.4% sequentially after adjusting to seasonal and price variations, following a revised 0.9% expansion in the third quarter, Statistics Denmark said today.

During the quarter ended December, government spending and foreign trade contributed negatively to overall GDP, the statistics office said.

Annually, GDP rose 2.7% in the fourth quarter as against 3.3% growth recorded in the third quarter.

In 2010 as whole, the economy grew 2.1% compared to 2009.

Sweden Retail Sales Growth, Producer Prices Drop

Swedish retail sales rose a working day adjusted 2.8% compared to the same period a year earlier in January, slowing from a 2.9% increase in December, Statistics Sweden said on Monday.

Sales of consumable goods decreased 0.1%, while those of durable goods increased 5.4% in January.

Swedish producer prices decreased 1.7% on a monthly basis in January following the 2.2% increase in December, the Statistics Sweden said today.

Greek Producer Price Inflation Dips

Producer price inflation in Greek industry eased to 7.3% in January from 7.6% in December, the Hellenic Statistics Authority said. A year earlier, prices rose 5.8%.

On a monthly basis, prices rose 0.9% in January compared to the 1.6% increase in December.

Hong Kong Tycoon Bids for E.ON''s U.K. Unit

Li Ka-shing, the Hong Kong tycoon is reportedly close to securing a £3.7 billion or $5.95 billion bid for German utility giant E.ON AG''s U.K. power distribution network. The addition of E.ON''s U.K. business would give Li control of 290,000 kilometers or 180,000 miles of cable supplying electricity to 30 million British homes.

Gainers & Losers

Associated British Foods Plc slumped 6.04% to 965.00 pence after the food, ingredients and retail company said its first-half results would be in line with expectations with “good revenue growth from all segments.”

Bayer AG gained 1.51% to €55.63 after the German health care and high-tech materials company said fourth quarter sales increased 14.5% to €9.01 billion from €7.87 billion in the prior year. Net loss in the quarter was €145 million compared to a profit of €153 million a year ago.

Nordex SE rose 2.44% to €6.79 after the Germany-based manufacturer and supplier of wind energy systems reported revenues fell 11.4% to €1.01 billion for 2010 compared to €1.14 billion last year. In 2010, new business rose 14% to €836 million from €737 million in the prior year.

Novartis AG climbed 0.73% to $55.25 after the Swiss healthcare giant said its shareholders are expected to vote on the proposed merger with eye care company Alcon, Inc. at an extraordinary general meeting scheduled for April 8.

The company also announced the commencement of a subsequent offering period for laboratory services provider Genoptix, Inc.

QSC AG surged 8.14% to €3.19 after the nationwide telecommunications provider in Germany reported fiscal year 2010 revenues increased 0.4% to €422.1 million from €420.5 million in the previous year. Consolidated net income for the year soared 340% to €24.2 million from €5.5 million last year.

Teleperformance SA climbed 1.18% to €27.45 after the French contact center-based customer relationship management service provider stated fiscal year 2010 revenues climbed 11.4% to €2.06 billion from €1.85 billion in the prior year. Net profit for the year declined 18.5% to €71.9 million or 1.27 euros per share compared to €88.2 million or 1.56 euros per share last year.