Greek Debt Auction Lifts European Market Indexes

Arjun Dave
10 May, 2011
New York City

European markets closed higher after Greece successfully completed the sale of 6-month debt and attracted a large chunk of foreign investors to the auction. Market indexes in Germany, Switzerland, Greece, Italy and Spain advanced. The IMF is expected to offer as much as

[R]4:30 PM Frankfurt – European markets closed higher after Greece successfully completed the sale of 6-month debt and attracted a large chunk of foreign investors to the auction. Market indexes in France, Germany, Switzerland, Greece, Italy and Spain advanced. The IMF is expected to offer as much as €80 billion in additional aid to Greece.[/R]

European stocks struggled as Greece completed its bond offering and but the larger question remained how much Greece will need before it regains its ability to raise money in market at interest rates it can afford to pay.

Greece completed 26-week Treasury bills auction that raised 1.26 billion euros at a yield of 4.88% and attracted bids of 3.58 times the securities offered according to the data available from the Public Management Agency in Athens.

The 34% of debt was sold to foreign investors according to the PDMA chief Petros Christodoulou.

The yields on Greek bonds declined after the completion of the debt sale and 2-year yield declined as much as 95 basis points to 24.70% before recovering to settle at 25.15%. The yield on 10-year bonds fell to 15.4%.

The successful auction also dragged the yield on Spain lower by three basis points lower to 5.29%. However, the yield on Irish bonds increased to 10.70% and on German 10-year bonds inched higher to 3.11%.

The IMF is expected to arrange between 60 billion euros and 80 billion euros in aid package that will help the struggling nation to refinance its debt of 30 billion through 2013.

The several news reports in Athens and Paris suggest that a bailout package in works is expected to be announced as early next week.

DAX 30 increased 106. 72 or 1.4% to 7,517.24 and CAC 40 index increased 1.1% or 45.25 to 4,052.51. The benchmark indexes in Athens and Milan added 1.5% and in Madrid gained 0.8%.

The market indexes in Sweden gained 0.7% and in Switzerland added 0.9%.

Stock Movers

Deutsche Post AG increased 1.3% to 13.66 euros after the package delivery company posted first quarter operating net increased 23% to 629 million euros and sales increased 6.9% to 12.8 billion euros.

Infineon Technologies AG gained 3.3% to 8.16 euros after the company said it plans to return 300 million to shareholders through a buyback of 40 million shares.

Centrotherm Photovoltaics AG soared 5% to 39.20 euros after the maker of solar panels production equipment reported first quarter earnings soared 85% to on a surge in orders from China.

Avenir Telecom SA closed unchanged at 1.07 euros after revenues for the fiscal year to March declined to 563 million euros from 571 million euros a year ago.

Credit Agricole Il de France said first quarter net income increased 17% to 84 million euros.

JCDecaux SA increased 1.1% to 23.42 euros said first quarter revenues increased to 535.3 million euros from 487.2 million euros a year ago.