European Stock Up After 6-day Slide; Allianz, Scor, Munich Re Fall

Arthi Gupta
17 Mar, 2011
New York City

European indexes gained after six straight days of declines as U.S. and European scientists help Japan contain radiation leak. A meeting of G7 finance ministers will discuss the impact of the Japanese earthquake on global economy. HeidelbergCement returned to profit.

[R]2:30 PM Frankfurt – European indexes gained after six straight days of declines as U.S. and European scientists help Japan contain radiation leak. A meeting of G7 finance ministers will discuss the impact of the Japanese earthquake on global economy. HeidelbergCement returned to profit.[/R]

Investors are hoping that a meeting of Group of Seven finance ministers tomorrow morning Japan local time may provide easier monetary stance around world while Japan battles multiple crisis.

The U.S. military said on Thursday it is augmenting its rescue efforts in Japan. Greg Jaczko, chairman of the U.S. Nuclear Regulatory Commission, said ""attempts to cool the reactor 2 at the Fukushima Dai-ichi nuclear complex don''t seem to be working"" and emergency workers in the vicinity could be exposed to ""potentially lethal"" radiation doses.

That cautious statement sparked a sell off in the yen trading and took the currency to a post World War II high to 76.30 to a dollar. The benchmark index dropped as much as 5% before recovering to close down 1.4%.

The government of Japan advised people within 12 miles of the Fukushima plant to evacuate due to radiation risk from the damaged reactors. The U.S. government, however, recommended Americans move at least 50 miles away from the plant.

Water cannons and helicopters lifted seawater used to drop cooling water on Japan''s damaged nuclear reactors are expected to cool off the temperatures but so far the efforts have not succeeded.

Prior to the water cannon operation, two military helicopters dropped seawater on the No. 3 reactor.

In the Middle East, at least six prominent opposition leaders were detained by authorities in Bahrain on Thursday, barely hours after a violent crackdown on anti-government protesters in the capital Manama.

On Wednesday at least three people were killed when troops fired on anti-government protesters mainly belonging to Bahrain''s majority Shia Muslim community.

Prime Minister Nouri al-Maliki of Iraq decried the military intervention and the country''s top-ranking Shia cleric, Grand Ayotollah Ali al-Sistani, urged Bahraini authorities to ""stop using violence against unarmed citizens.""

Iran recalled its ambassador from Bahrain to protest the crackdown on Shiite protesters.

In Paris CAC-40 index gained 31.15 or 0.84% to 3,727.71 and in Frankfurt DAX index edged higher 60.87 or 0.93% to 6,574.71.

Insurance stocks declined for the third day in a row as the prospect of losses linked to Japan disaster mount.

Hannover Re declined 7.5% to €35.75 and Munich Re fell 4.3% to €106.85 and Allianz SE declined 3.2% to €96.55.

Scor SE and Allianz said that it was too early to estimate losses linked to Japan disaster and nuclear plants but Munich Re said most of the losses are likely to be borne by the Japanese government and not the insurance industry.

Four of the five most expensive disasters in the past thirty years have occurred in the last thirteen months according to U.S. based industry association. Two earthquakes in New Zealand and a quake in Chile and in Japan and Hurricane Katrina in 2005 in Gulf of Mexico.

Gainers & Losers

Credit Agricole S.A. fell 2.39% to €11.02 after the French lender said that it expects net income Group share in the range of €6 billion to €7 billion with net banking income over €25 billion for fiscal year 2014.

Deutsche Lufthansa AG dropped 0.52% to €13.49 after the German carrier said fiscal year 2010 revenue rose 22.6% to €27.32 billion from €22.28 billion in the previous year.

Net profit for 2010 was €1.13 billion compared with a loss of €34 million a year ago. Earnings per share were 2.47 euros reversing from a loss of 0.07 euros last year.

The company also said it will order 35 new aircraft worth $4 billion at list prices from Airbus and Boeing Co.

HeidelbergCement AG gained 2.39% to €45.82 after the German building materials company said fourth quarter turnover increased 6% to €2.89 billion from €2.73 billion a year ago. On a like-for-like basis, turnover rose 3.2%.

Group share of profit for the quarter was €100 million or 0.53 euros per share, compared with a loss of €377 million or 3.01 euros per share last year.

Krones AG rose 0.78% to €44.78 after the beverage filling and packaging technology company reported fiscal year 2010 consolidated sales grew 17% to €2.173 billion from €1.865 billion in the prior year. Earnings for the year were €50.9 million compared to a loss of €34.5 million last year.

Lanxess AG decreased 2.25% to €48.00 after the specialty chemicals company reported fourth quarter sales grew 32% to €1.83 billion from €1.39 billion in the same quarter last year.

Net income in the quarter surged 86% to €26 million or 0.32 euros per share from €14 million or 0.17 euros per share a year ago.

Mayr-Melnhof Karton AG slipped 1.22% to €76.01 after the manufacturer of carton boards reported fourth quarter sales grew 11.6% to €463.2 million from €415.0 million in the same quarter last year. IFRS profit in the quarter rose 59% to €27.2 million or 1.35 euros per share from €17.1 million or 0.75 euros per share last year.

Porsche Automobile Holding SE advanced 2.58% to €52.01 after the sports-car maker reported group profit after tax of €1.29 billion for the short fiscal year 2010 from August 1, 2010 to December 31, 2010.