European Indexes Rebound, Spain Sells

Arjun Dave
24 May, 2011
New York City

European markets traded higher after Spain completed the treasury auction to raise 2.3 billion euros. German left its first quarter economic expansion at 1.5% and a private measure of business confidence index was flat in May. European regulators canceled 200 scheduled flights.

[R]2:40 PM Frankfurt – European markets traded higher after Spain completed the treasury auction to raise 2.3 billion euros. German left its first quarter economic expansion at 1.5% and a private measure of business confidence index was flat in May. European regulators canceled 200 flights as volcanic ash drift towards to continental Europe.[/R]

European market indexes rebounded after sentiment improved and prices of crude oil, precious metals and commodities rebounded.

Speculations from brokers contributed to market momentum and crude oil advanced $1.30 a barrel to $99 and gold price increased $5.25 to $1,522.80 a troy ounce.

Industrial new orders for EU17 area decreased 1.8% in March, after rising 0.5% in February and for the wider region of EU27 new orders fell 1.9% in March following an increase of 1.0% in February.

Germany left its estimate of first quarter economic growth at 1.5% matching its first estimate and the business climate index tracked by Ifo was flat in May at 114.2 matching the level in April.

Spain completed the sale of 2.3 billion euros of 3- and 6-month treasury bills. The demand at the auction was healthy despite the recent losses suffered by the ruling party in local elections.

DAX 30 index increased 0.7% or 53.29 to 7,174.81 and CAC 40 index increased 0.3% or 12.80 to 3,919.78. The benchmark indexes in Madrid increased 0.5%, in Milan and Zurich gained 0.2% and in Athens added 0.4%.

Stock Movers

Travel and leisure related stocks traded lower after European air traffic management agency cancelled 200 flights today as volcanic ash drift to continental Europe.

Airlines stocks dropped as much as 4% in the early trading but recovered. Air France-KLM declined 0.3%, Lufthansa recovered to 0.3% increase and British Air and Iberia parent International Consolidated Airlines Group fell 1.6% to 231.30 pence.

Ryanair increased 0.3% after it proposed to increase fares as much as 12% and EasyJet fell 0.03%.

Energy complex linked stocks closed higher. Royal Dutch Shell plc increased 1.4% to 2,124 pence and Eni SpA increased 1.1% to 16.38 euros.

Automakers traded higher in Europe. BMW AG increased 1.7% to 60.15 euros and Daimler AG increased 1.8% to 48.22 euros. Volkswagen AG declined 0.3% to 111.25 euros and PSA Peugeot Citroen SA declined 0.09% to 28.73 euros.

LVMH Moet Hennessy extended gains for the second day in a row by 1.3% to 117.55 euros and PPR SA advanced 1.7% to 117.10 euros.

Insurance companies in Europe generally traded higher. Allianz SE gained 0.06% to 94.13 euros and ING Grope NV added 0.5% to 8.17 euros but Aviva plc in London declined 0.3% to 422.09 pence.