Banks, Commodities Lift European Indexes

Arthi Gupta
27 May, 2011
New York City

European indexes edged higher as commodities prices rose and an upgrade of the European banking sector. Euro-zone economic sentiment weakened in May and M3 money supply growth slowed in April. Boston-based Thomas H. Lee Partners acquired Sword Insurance.

[R]3:00 PM Frankfurt – European indexes edged higher as commodities prices rose and an upgrade of the European banking sector. Euro-zone economic sentiment weakened in May and M3 money supply growth slowed in April. Boston-based Thomas H. Lee Partners acquired Sword Insurance.[/R]

The European market indexes traded higher as the sentiment in the euro-zone declined and M3 money supply growth slowed in April. The indexes across the region declined on the on going worries related to Greece but staged a reversal after the U.S. market opened.

The U.S. indexes gained after personal income and spending saw continued growth in the month of April.

The European markets climbed after Citigroup upgraded the European banking sector to overweight and a report in the Financial Times that banks in the European Union could evade part of the Basel III capital requirements under draft legislation implementing the globally agreed standards across the 27-member bloc.

The major Asian markets traded mixed with the Japan and China market indexes retreating, while most other markets closing higher.

The Group of Eight is resolved to see Libyan leader Col. Moammar Qadhafi go, with U.S. President Barack Obama warning on Friday that the NATO-led air strikes would not end until he was ousted from power.

""We agreed that we have made progress on our Libya campaign, but that meeting the UN mandate of civilian protection cannot be accomplished when Qadhafi remains in Libya directing his forces in acts of aggression against the Libyan people,"" Obama said at the G8 world leaders'' summit in Deauville, France.

In Paris CAC-40 Index gained 38.45 or 0.95% to 3,955.67 and in Frankfurt DAX index edged higher 35.96 or 0.51% to 7,150.05.

A report released by the GfK NOP showed that confidence among UK consumers rebounded strongly in May, as they turned more optimistic about the personal as well as general economic situation over the next year. The consumer confidence index jumped 10 points to -21.

However, a survey carried out by the European Commission showed that euro area''s economic sentiment weakened in May. The European Commission reported that its economic sentiment indicator for the euro zone region fell to 105.5 in May from 106.1 in April.

The overall decline in the euro area resulted from weakening confidence in all the business sectors, while sentiment improved among consumers.

Private Equity Fund Acquires Sword Insurance

Sword Insurance, a unit of French-owned Sword Group, announced that it agreed to be acquired by U.S private equity firm Thomas H. Lee Partners L.P. Additional terms of the transaction were not disclosed.

Gainers & Losers

Aegon N.V surged 3.73% to €4.83 after the Dutch insurer has been upgraded to ""buy"" from ""neutral"" by BofA Merrill Lynch.

European Aeronautic Defence and Space Co. fell 0.16% to €22.47 after the airbus maker reiterated its earnings outlook for fiscal year 2011 and said it expects cash flow to be positive in the year.

Iberdrola SA gained 1.03% to €6.11 after the Spanish power company had its rating outlook for the senior unsecured A3 ratings changed from negative to stable by Moody''s Investors Service.

OrCo Germany S.A. rose 2.31% to €0.80 after the real-estate company reported a net profit of €2.2 million in the first quarter of 2011 versus a net loss of €7.2 million in the year-ago quarter helped by lower interest charges and valuation gains realized on derivative instruments.