European Markets Rebound, Tighter Stress Test

Arjun Dave
08 Apr, 2011
New York City

European markets inched higher and commodities gained. Miners and banks led the gainers in the regional trading and crude oil traded above $111 a barrel. The euro firmed against the dollar.

[R]2:00 PM Frankfurt – European markets inched higher and commodities gained. Miners and banks led the gainers in the regional trading and crude oil traded above $111 a barrel. The euro firmed against the dollar.[/R]

European markets advanced after miners and resource linked stocks led the gainers in the region. Investors showed a willingness to acquire stocks after Portugal sought EU bailout.

The damage from the aftershock of 7.1 magnitude earthquake in Japan was limited and Fukushima Daiichi nuclear power plant was spared from additional troubles.

DAX 30 index increased 0.7% or 42.44 to 7,220.92 and CAC 40 index increased 0.9% or 35.85 to 4,064.13. Milan benchmark index increased 0.7% and indexes in Athens, Stockholm and Zurich gained 0.3%.

European banking regulators toughened the pass test for the stress test scheduled later in the year and will not allow inclusion of silent capital in core capital. Banks will be required to have at least 5% of core Tier 1 capital.

UK producer prices index or wholesale annual inflation for all manufactured products rose 5.4% in March. Between February and March output price rose 0.9% mainly reflecting price rises in petroleum, food and alcohol products.

German exports rose at the fastest pace in five months in February according to the latest data from the Federal Statistics Office. After adjusting for seasonality, exports increased 2.7% from January to 84.7 billion after declining 1% in January.

Swiss unemployment rate declined to 3.4% in March from 3.6% in February according to the latest statistics from the State Secretariat for Economic Affairs.

After adjusting for seasonality the unemployment rate declined to 3.3% form 3.4% in February as manufacturing and financial services drove the employment.

Stock Movers

Resource stocks gained after gold, silver and crude oil traded higher.

Vestas Wind Systems A/S increased 1.1% to 202.70 kroner after the company said it is in negotiations with Eldepasco NV for a project in Belgium.

E.ON AG increased 0.8% to 22.35 euros after UBS AG recommended the stock.

TNT dropped 9.2% to 16.51 euros after the package delivery company said express delivery business profit declined in the first quarter on the recent turmoil in Middle East and North Africa and natural disasters in Australia.

Volkswagen AG declined 0.5% to 105.80 euros and PSA Peugeot SA increased 0.1% to 28.74 euros.

Deutsche Bank increased 0.6% to 42.75 euros and BNP Paribas SA added 0.9% to 54.82 euros.

Aegon NV increased 0.6% to 5.56 euros and ING Groep NV increased 1% to 9.20 euros.