Euro Area GDP Expands 0.3%, ECB Holds Rates; Carrefour, GDF Suez Net Up

Arthi Gupta
03 Mar, 2011
New York City

The European indexes soared after the ECB retained key rate; European service sector activity showed mixed trends and retail sales improved. Spanish consumer confidence rose in February. Total agreed to acquire minority stake in Russia-based Novatek for $4 billion.

[R]3:30 PM Frankfurt – The European indexes soared after the ECB retained key rate; European service sector activity showed mixed trends and retail sales improved. Spanish consumer confidence rose in February. Total agreed to acquire minority stake in Russia-based Novatek for $4 billion.[/R]

World indexes rose after oil prices retreated for the first time in three days on reports that Venezuelan president Hugo Chavez offered to mediate.

The Arab League is engaged in talks with Venezuela on sending mediators to Libya, reported Hesham Youssef, chief of staff for the group’s secretary general, Amr Moussa.

In Paris CAC 40 Index surged 59.99 or 1.49% to close at 4,094.31 and in Frankfurt DAX Index edged higher 109.73 or 1.53% to close at 7,290.85.

Global Food Prices at Record High

World food prices hit a record high in February, according to data released by the Food and Agriculture Organization today.

The FAO said that its food price index averaged 236 points in February, up 2.2% from January, the highest record in real and nominal terms. The index has now risen for eight consecutive months.

ECB Retains Key Rate

The European Central Bank on Thursday maintained its key interest rate at a historic low of 1% for the 22nd straight month.

The central bank also retained its interest rate on the marginal lending facility at 1.75% and that on the deposit facility at 0.25%.

Euro-zone Private Sector Activity Accelerates, Retail Sales Up

Euro-zone private sector activity grew in February at its fastest pace since July 2006, survey results from Markit Economics showed today.

The Final Composite Output Index rose to 58.2 in February, below the earlier flash estimate of 58.4. But the index was well above January’s reading of 57.

The Purchasing Managers'' Index for the service sector rose to 56.8 in February from 55.9 in January. The flash estimate for February was 57.2.

Euro-zone retail sales grew 0.4% in January from a month ago, the Eurostat said in a report on Thursday. This follows a revised 0.4% drop in December.

The annual increase in January retail sales was 0.7% compared to December''s revised 0.4% decrease.

Food product sales slipped 0.8% annually in January after easing 0.7% in December. Growth in non-food product sales accelerated to 1.5% in January from 0.3% in December.

Euro Area GDP Expands

Euro area gross domestic product rose 0.3% sequentially in the fourth quarter, the same as in the third quarter, second estimate from the Eurostat showed on Thursday.

On an annual basis, GDP climbed 2%, unrevised from the flash estimate released on February 15. Growth edged higher from 1.9% recorded in the third quarter.

2010 GDP increased 1.7% in the euro area.

German Retail Sales Improve, Services PMI Falls

German retail sales grew 1.4% in real terms in January following a 0.3% rise in December, the Federal Statistics Office said.

The annual increase in retail turnover in January was 2.6% compared to a fall of 0.5% in December.

Germany purchasing managers'' index for the services sector fell to 58.6 in February from 60.3 in January, survey results from Markit Economics showed on Thursday.

French ILO Jobless Rate Drops, Service Sector Activity Improves

French jobless rate under the definition of International Labor Organization fell to 9.6% in the fourth quarter from 9.8% in the third quarter, statistics office Insee said on Thursday.

Jobless rate in the metropolitan France eased to 9.2% in the fourth quarter from 9.3% in the third quarter. There were 2.6 million unemployed people in the final three months of the year.

French service sector activity improved in February, final data from Markit Economics showed today.

The seasonally adjusted service activity index rose to a six-month high of 59.7 in February from 57.8 in January.

Swiss Retail Sales Decline

Switzerland''s seasonally adjusted retail turnover fell 1.8% on a monthly basis in January in real terms, the Federal Statistics Office said today. In nominal terms, there was a monthly decline of 1.6%.

Spanish Service Sector, Consumer Confidence Grow

Spain''s Purchasing Managers'' Index for the services sector rose to 50.8 in February from 49.3 in January, Markit Economics said on Thursday. This was the first rise in services activity since July 2010.

Spanish consumer confidence rose for the second straight month in February, according to a key survey.

The Official Credit Institute''s sentiment indicator rose to 73.4 in February from 70.7 in January. Households'' view on the current economic situation improved, with the corresponding indicator rising to 48.3 in February from 47.6 in January.

Santander Contemplates Bid for CitiFinancial

Banco Santander SA, the Spanish bank is seeking to join a group that is bidding for CitiFinancial, the U.S. consumer lending arm put up for sale by Citigroup Inc., according to media reports on Wednesday. The bank and private-equity firm Warburg Pincus LLC are expected to make a joint bid.

Total Acquires Minority Stake in Novatek

Total S.A. agreed Wednesday to acquire a minority stake in Russian gas producer OAO Novatek for about $4 billion, and said it will join its Yamal LNG project as a strategic partner. The stake acquisition is expected to close by next month, and the Yamal LNG project deal is anticipated to close by July 2011.

The French explorer also plans to raise its holding to 15% within 12 months and to 19.4% within the next three years.

Gainers & Losers

Adecco SA surged 6.08% to Sfr65.45 after the Switzerland-based provider of human resource services said fiscal year 2010 revenues surged 26% to €18.7 billion from the year-ago period. Net income for the year surged to €423 million versus €8 million in 2009. Full-year basic earnings per share jumped to 2.20 euros from 0.04 euros in the prior-year period.

Anheuser-Busch InBev N.V. gained 2.81% to €41.30 after the largest global brewer reported fourth quarter revenue increased 0.2% to $9.47 billion from $9.3 billion in the comparable period last year. Profit in the quarter declined 24.4% to $968 million or 61 cents per share from $1.28 billion or 81 cents per share in the prior-year quarter.

ASM International N.V. fell 2.38% to €29.55 after the semiconductor capital equipment supplier reported fourth quarter net sales grew 74% to €352 million from last year. Net earnings in the quarter were €25 million compared to a net loss of €12 million in the fourth quarter last year.

Beiersdorf AG climbed 0.39% to €43.38 after the German cosmetics and personal care products maker reported fiscal year 2010 group sales increased 7.8% to €6.19 billion from €5.75 billion in the previous year. Profit for the year improved 11.8% to €425 million or 1.84 euros per share from €380 million or 1.65 euros per share in the previous year.

Carrefour SA increased 2.05% to €34.29 after the French retail giant reported full-year 2010 total revenues grew 5.5% to €91.51 billion from €86.75 billion in the prior year. Net income surged 56.7% to €433 million from the restated €276 million in the prior year.

Continental AG declined 1.54% to €60.67 after the Germany-based automotive industry supplier said fiscal year 2010 sales grew 30% to €26.05 billion from €20.1 billion in the prior year. Full-year 2010 net income was €576 million or 2.88 euros per share compared to loss of €1.65 billion or 9.76 euros per share a year ago.

GDF Suez SA climbed 1.51% to €28.64 after the French energy company reported fiscal year 2010 revenue increased 5.7% to €84.48 billion from €79.91 billion in the previous year. Net income for the period rose 3.1% to €4.62 billion compared with €4.48 billion a year ago.

Pharming Group N.V. slumped 3.36% to €0.14 after the Netherlands-based biotechnology company said fiscal year 2010 revenues grew 71% to €573,000 from €335,000 a year ago. Full-year 2010 loss widened 57% to €50.22 million from €32.06 million last year. On a per share basis, loss narrowed to 0.19 euros from 0.28 euros in the prior year.

ProSiebenSat.1 Media AG fell 3.20% to €23.00 after the German broadcasting company reported fourth quarter revenues rose 8.4% to €954.1 million from last year''s €880.4 million. Net profit after taxes and non-controlling interests rose 60% to €181.5 million from €113.4 million a year ago.