European Slide, Banks, Miners Rise; Greece in Focus

Arjun Dave
25 May, 2011
New York City

European markets traded lower on the ongoing worries related to Greece Italy and Ireland. Greek opposition party leader rejected privatization plan. Banks and mining companies rebounded on bargain hunting. Automakers in Germany closed higher.

[R]2:00 PM Frankfurt – European markets traded lower on the ongoing worries related to Greece Italy and Ireland. Greek opposition party leader rejected privatization plan. Banks and mining companies rebounded on bargain hunting. Automakers in Germany closed higher.[/R]

European markets edged lower as commodities rebounded. Banks and industrial stocks were in favor as investors sought bargains.

DAX 30 index declined 0.4% or 25.17 to 7,125.49 and CAC 40 index fell 0.5% or 20.83 to 3,896.

The euro declined 0.3% to $1.407.

Olli Rehn, the European commissioner for economic and monetary affairs in an interview with Austrian newspaper Die Presse urged Greece to accelerate its 50 billion euros privatization program. He also urged Greek government to meet its budget goals.

Greek opposition party opposed the government privatization program and Prime Minister George Papandreou is scheduled to meet President Karolos Papoulias.

UK first quarter GDP rose 0.5% after falling 0.5% in the fourth quarter and gained 1.8% from a year ago. Construction output fell by 4.0% and production output fell 0.2%. First quarter trade deficit in real terms decreased to £5.7 billion.

UK service sector index increased 1.0% in March from a year ago month. Between February and March output from the service sector rose 0.6%. The largest contribution to the increase was 1.0% in the business services and finance.

Stock Movers

Utilities traded higher. E.ON AG added 2.4% to 20.14 euros and RWE AG gained to 1.5% to 41.33 euros after a speculation in media that German government may cancel tax on nuclear reactors.

BNP Paribas increased 0.95% to 51.81 euros, Intesa SanPaolo SpA added 3.2% to 1.73 euros and UniCredit SpA advanced 1% to 1.54 euros.

Miners traded higher. Antofagasta increased 1.95% and Kazakhmys gained 1.1%.

Cable & Wireless Communications dropped 9.3% after it said no improvement in its Caribbean markets. Full year profit declined.

Tech companies declined after Applied Materials reported weaker than expected earnings. Infineon Technologies dropped 0.7%.

Automakers in Germany closed mixed. Volkswagen AG increased 1.1% to 112.30 euros and Daimler AG fell 0.3% to 47.78 euros. BMW AG rose 0.5% to 60.59 euro.