Eurpean Markets Advance; Richemont Misses Earnings

Nigel Thomas
19 May, 2011
New York City

European markets closed higher after commodities and resource linked stocks advanced. Glencore International closed up 2% on its first day of trading. Richemont declined after it reported lower than expected earnings. Pandora A/S plunged 15% after it increased prices of jewelry.

[R]5:00 PM London – European markets closed higher after commodities and resource linked stocks advanced. Glencore International closed up 2% on its first day of trading. Richemont declined after it reported lower than expected earnings. Pandora A/S plunged 15% after it increased prices of jewelry.[/R]

European markets traded higher as resource sectors stocks and commodities advanced.

Peripheral markets in Europe were in focus as talks of Greek debt restructuring gained momentum among European Union officials only a day after a campaign to avoid the outcome.

CAC 40 index increased 1.4% or 56.99 to 4,034.99 and DAX 30 index added 95.23 or 1.3% to 7,398.76.

UK volume of retail sales in April increased 2.8% from a year ago month and the value of retail sales increased 6.2%. Predominantly food stores sales increase by 1.4%. Total sales volume for two months to April increased 1.1%.

UK unemployment rate for three months to March was 7.7%, fell 0.1 percentage point from the previous three month period. The number of unemployed decreased 36,000 in the quarter to 2.46 million.

Dominique Strauss-Kahn resigned as head of the International Monetary Fund as he faces charges of attempted rape of a New York maid hotel and remains in custody in New York.

French leaders worked behind the scenes to restrict media coverage of the incident and also tried to install another French leader at the multilateral institution. China, Germany and India are also contending for the top position.

Stock Movers

Cie. Financiere Richemont SA declined as much as 2.2% to Sfr 54.50 after it reported lower than expected annual earnings on higher costs of precious metals and operating costs.

The Switzerland based luxury goods maker reported results for the year ended March sales surged 33% to €6,892 million compared to €5,176 in the same period last year.

Profit for the year increased by 79 % to €1,079 million and earnings per share increased 79% to €1.925 on a diluted basis compared to € 603 million or €1.076 per share a year ago.

Pandora A/S the plunged 15% to 213.30 kroner after the Danish jewelry maker said it plans to increase prices for the first time in its history after prices of gold and silver soared in the last two years.

Glencore International Plc increased 2% on its first day of trading in London after it raised $10 billion in the initial public offering. The Switzerland based commodities trader raised its initial public offering price by 30% in the last one week of road show.

Resource linked companies traded higher.

BP Plc gained 2.2% to 450.65 pence, Royal Dutch Shell added 0.4% to 2,171 pence and Total SA increased 1.6% to 41.42 euros.

Xstrata Plc increased 0.50 pence to 1,405.50 pence, BHP Billiton gained 0.9% to 2,401 pence and Eurasian Natural Resources advanced 1% to 849 pence.