European Indexes Soar 2%; Swiss Re Estimates $1.2 Billion Japan Losses

Marcus Jacob
21 Mar, 2011
New York City

European markets surged after Japan nuclear meltdown fears receded. Wireless carriers in Europe were on the upswing after Deutsche Telekom agreed to sell its U.S. unit for $39 billion. Insurance stocks increased after Swiss Re estimated $1.2 billion of losses linked to Japan quake.

[R]4:00 PM Frankfurt – European markets surged after Japan nuclear meltdown fears receded and France and UK carried out military strike. Wireless carriers in Europe were on the upswing after Deutsche Telekom agreed to sell its U.S. unit for $39 billion. Insurance stocks increased after Swiss Re estimated $1.2 billion of losses linked to Japan quake.[/R]

European markets soared after investors focused on deal news and Japan nuclear crisis eased. Crude oil rebounded after allied forces struck military installation in Libya.

Tokyo Electric Power said it has reconnected power to two of the failed reactors at Fukushima Daiichi power plant prompting Japanese Prime Minister Naoto Kan said at a press conference he can see “light at the end of the tunnel.”

The military strike on Libya lifted crude futures but investors bid up the stock after AT&T agreed to acquire T-Mobile for $39 billion and Charles Schwab agreed to buy online options trading firm for $1 billion.

Crude oil futures increased to $102.70 a barrel after France and UK led a military attack to Libyan military targets near Bengazi that killed as many as 150 civilians.

The controversial attack opposed by Turkey, China and Russia and Arab League and African Union called for immediate halt of bombardment.

“What is happening in Libya differs from the aim of imposing a no-fly zone, and what we want is the protection of civilians and not the bombardment of more civilians,” said Arab League general secretary Amr Moussa.

The Libyan attack commenced on the eight anniversary of the invasion of Iraq.

CAC 40 index in Paris trading increased 2.2% or 81.22 to 3,891.44 and DAX 30 index in Frankfurt gained 13417 or 2.01% to 6,798.57.

Stock Movers

Deutsche Telekom AG soared 13% after it agreed to sell its U.S. wireless company T-Mobile USA for $39 billion in a stock and cash deal to AT&T Inc. The German company is likely to end up with 8% stake in the AT&T.

The news of sale also lifted the European wireless carriers. Vodafone Group Plc soared more than 3%.

ING Groep NV increased 3.7% to €8.98 after the Dutch financial services group said General Electric Co. is one of the companies looking to buy its online bank in the U.S.

Vodafone Plc increased 3.7% to 175.95 pence after AT&T agreed to acquire T-Mobile USA limiting the number of players in U.S. market. Vodafone acquire 49% stake in Verizon Wireless in the U.S.

Swiss Reinsurance Co. increased 1.7% to Sfr50.81 after the second largest reinsurers estimated losses related to Japan earthquake and tsunami of $1.2 billion.

Munich Re increased 1.9% to €110.10 after Swiss Re announced less than expected losses linked to Japan.