European Markets Decline on Lower Oil; Allianz, Aegon Net Plunge

Arjun Dave
12 May, 2011
New York City

European market indexes edge lower as commodities fall and resource linked stock led the decliners. Industrial production in the euro-zone fell 0.2% in March but surged from a year ago, but market focused on the falling commodities prices. Aegon NV and Allianz SE reported lower net incomes.

[R]2:00 PM Frankfurt – European market indexes edge lower as commodities fall and resource linked stock led the decliners. Industrial production in the euro-zone fell 0.2% in March but surged from a year ago, but market focused on the falling commodities prices. Insurers traded lower after Aegon NV and Allianz SE reported a sharp plunge in profits.[/R]

European markets traded lower after resources and commodities linked companies led the decliners. Miners, and energy related companies fell in London, Frankfurt and Paris. Industrial output in the euro-zone fell in March.

Industrial output in 17-nations euro zone fell 0.2% and 0.3% in the wider zone of EU 27 from previous month and rose 5.3% in the euro area and 4.6% in the EU 27 from a year ago.

The International Energy Agency today cut its 2011 outlook for oil demand helping the crude oil futures by 2.8% to $95.47 a barrel.

Total UK production output in March rose 0.7% from a year ago. Output in mining decreased 10.7% and energy increased 1.6%. Manufacturing output surged 2.7% in February from a year ago month.

CAC 40 index declined 1.2% or 51.29 to 4,006.79 and DAX 30 index fell 1.5% or 112.50 to 7,383.00.

Stock Movers

Fresnillo Plc plunged 7.4% after July delivery of silver dropped 7% to $32.85 an ounce. In London, Kazakhmys Plc declined 3.7% and Anglo American Plc fell 3.1%.

Energy complex companies also traded lower. Total SA declined 2% but airlines traded higher. BP Plc and Royal Dutch Shell declined nearly 2%.

Deutsche Lufthansa AG gained 2.4% and Air France KLM added 0.6%.

Separately, International Consolidated Airlines Group, the parent of British Air and Iberia gained 0.3% after the media reports suggested that the union members are expected to meet on Thursday to bring to an end to long running series of strikes.

Germany based electricity generator RWE AG declined 0.9% after it reported first quarter earnings ahead of expectations and guided weaker results for the rest of the year on new tax on nuclear fuel and difficult market conditions.

Insurance companies declined after Aegon NV fell 5.7% after the Dutch insurer reported 12% decline in quarterly profit. Allianz SE declined 1.5% in Frankfurt trading after the diversified insurer reported 45% drop in the latest quarter.

Old Mutual Plc declined 3.5% in London trading after it reported lower sales in the first quarter and net asset outflow.

Lafarge SA gained 1.8% after the French cement maker agreed to sell its cement and concrete assets in the Southeast U.S. to Colombia based Cementos Argos that valued the assets at $760 million including debts.

Natixis SA increased 0.3% after the bank reported quarterly earnings ahead of expectations.