European Markets Positive, Italy Sells

Arjun Dave
30 May, 2011
New York City

European markets overlooked the ongoing Greek debt worries and focused on valuations and earnings. Italy completed the sale of 8.3 billion euros and Spain is set sell bonds on June 2. Greece confirmed its plan to complete austerity measures despite the opposition from other ruling parties.

[R]5:00 PM Frankfurt – European markets overlooked the ongoing Greek debt worries and focused on valuations and earnings. Italy completed the sale of 8.3 billion euros and Spain is set sell bonds on June 2. Greece confirmed its plan to complete austerity measures despite the opposition from other ruling parties.[/R]

European markets overlooked the ongoing Greek debt restructuring talks. Italy completed the sale of 8.3 billion euros bonds and yields on 10-year bonds rose. Spain is set to complete its offering of 3.5 billion euros this week.

Greece remained the focus of investors as European Union regulators and the International Monetary Fund worked to accelerate the nation’s privatization program. According to a private report published in German media quoting sources at the IMF, Greece is lagging in meeting all budgetary goals established by the European Union regulators.

Greek prime minister said the nation is committed to completing 50 billion euros privatization program and completing 28 billion euros austerity measures.

The DAX 30 index edged lower 5.80 to 7,157.67 and the CAC 40 index fell 5.78 to 3,945.20. The indexes Spain and Greece closed fractionally higher but in Italy declined a fraction.

Italy completed the sale of 8.3 billion euros of bonds maturing in 2014, 1018 and 2021. Italy sold 3.5 billion euros of bonds maturing at 2014 at 3.43% and received the 1.34 times bids.

Italy also sold 2.95 billion euros of bonds maturing in 2021 at 4.75% yield and received 1.58 times bids and in additional sold 1.83 billion euros of floating rate 2018 bonds.

The yield on 10-year Italian bonds rose to 4.8% and yields on 10-year Spanish bonds rose to 5.37%. Spain is scheduled to sell bonds maturing in 2014 and 2015 on June 2.

Stock Movers

Greek banks were in focus as the nation struggles with the austerity measures and lags in privatization program.

Alpha Bank dropped 5.3% to 3.03 euros and EFG Eurobank Ergasias SA declined 2.3% to 2.99 euros.

European nuclear utility companies declined after German Environment Minister Norbert Roettgen confirmed the tax on spent fuel rods during the nuclear power plant shut down.

RWE AG 2.3% to 40.06 euros and E.On AG fell 1.8% to 19.66 euros.

Dexia SA increased 1.3% to 2.45 euros and extended gains for the second day after the Brussels based bank said it will take a charge of 3.6 billion euros and sell U.S. mortgage backed securities.

Fiat SpA increased 1% to 7.27 euros after the Italian auto maker confirmed its plan to acquire the U.S. government stake in Chrysler and increase its stake in the company to 57% in the next six months.