European Markets Advance; Swiss Inflation Accelerates, German Orders Rise

Marcus Jacob
06 Apr, 2011
New York City

European markets traded higher on the eve of rate decision tomorrow. Portugal completed the sale of 1 billion euros bonds at a yield of 5.9%. Switzerland inflation accelerated and German factory orders increased at a faster pace in February.

[R]1:40 PM Frankfurt – European markets traded higher on the eve of rate decision tomorrow. Portugal completed the sale of 1 billion euros bonds at a yield of 5.9%. Switzerland inflation accelerated and German factory orders increased at a faster pace in February.[/R]

European stocks traded higher ahead of a rate decision tomorrow by the European Central Bank. Asian markets generally closed lower as the benchmark index in Tokyo declined on the production loss worries.

German factory orders soared at a faster than anticipated pace in February and Swiss inflation accelerated in the month.

DAX 30 index increased 42.12 or 0.6% to 7,217.43 and CAC 40 index in Paris traded up 2.1 to 4,043.84.

The benchmark index in Spain added 1.25% or 133.60 to 10,812.20 and in Portugal fell 0.9% to 2,804.38. The benchmark index in Italy increased 1.1% to 22,304.10.

Indexes in Sweden and Norway added 0.24%.

Investors are speculating that the European Central Bank will raise rate tomorrow as inflation hovers above the target range set by the bank. The rate increase is widely anticipated as the central bank has sounded hawkish tone in the last three months.

German factory orders increased 2.4% in February after adjusting for seasonal factors according to the Economy Ministry in Berlin.

Switzerland’ consumer prices index on annual basis increased 1% in March from 0.5% increase in February according to the Federal Statistics Office today.

Portugal completed the sale of 2012 securities of 1 billion euros that yielded 5.902%. The yield has surged nearly 150 basis points in less than three weeks as the nation drifts to external bailout and the election looms in less than two months.

Stock Movers

Commerzbank increased 1.6% after the German bank said it plans to raise 10.5 billion euros to repay government loan of 14.3 billion euros. Commerzbank also said full-year operating profit are ahead of expectations and may pay a dividend in fiscal 2012.

Deutsche Bank declined as much as 2.2% but recovered to a loss of 15 cents to 41.75 euros.

Industrial stocks gained in Frankfurt trading after the release of German factory orders.

MAN increased 45 cents to 90.86 euros and Daimler added 19 cents to 52.61 euros.

BMW increased 15 cents to 61.15 euros and VW decreased 15 cents to 110.65 euros.

Daimler and Rolls Royce Group launched their public offer to acquire a majority stake in Tongum.

ThyssenKrupp increased 2.5% to 30.10 euros.

In Paris trading, Natixis SA gained 7 cents to 4.12 euros and BNP Paribas increased 60 cents to 53.07 euros.

EDF dropped 4% to 27.10 euros on the worries that government may restrict the price increase on retail natural gas.

Intesa SpA soared 4.5% to 2.20 euros after the Italian bank estimated net income of 4.2 billion euros and planned to sell shares to raise 5 billion euros after the board meeting on April 5.