Greece Debates Austerity Plan; European Indexes Higher

Arthi Gupta
21 Jun, 2011
New York City

The European indexes traded higher ahead of the crucial confidence vote by the Greek Prime Minister George Papandreou. Weatherford settled claims with BP relating to the Deepwater Horizon oil spill. Elekta agreed to buy Nucletron for

[R]2:10 PM Frankfurt – The European indexes traded higher ahead of the crucial confidence vote by the Greek Prime Minister George Papandreou. Weatherford settled claims with BP relating to the Deepwater Horizon oil spill. Elekta agreed to buy Nucletron for €365 million.[/R]

European indexes gained on optimism of a resolution to the Greek debt crisis. Greek Prime Minister George Papandreou is seeking a crucial vote of confidence this evening in the Parliament that will be a deciding factor for the second tranche of bailout by the European Union and the International Monetary Fund.

Prime Minister Papandreou is facing a confidence motion that has been debated since June 19 and is expected around midnight today. The situation has been volatile for the prime minister after two Parliament members of his party resigned and one resigned from the party.

Papandreou now controls 155 seats in the 300-seat legislative body.

The Greek Prime Minister has to get the parliamentary approval to implement the €28 billion austerity measures and €50 billion privatization package in order to avail the next tranche of €12 billion of the first bailout of €110 billion.

Luxembourg's Prime Minister Jean-Claude Juncker told reporters yesterday that a “solution will be found” to the Greek debt crisis.

Asian markets rose after worries of Greek debt default eased. Traders are cautious ahead of the U.S. Federal Reserve's two-day policy meeting, the first after a string of weak economic data in the last six weeks.

Germany's economic sentiment dropped more than expected in June, ZEW Centre for European Economic Research said. The corresponding indicator slipped 12.1 points to negative 9 points in June.

In Paris CAC-40 Index gained 39.99 or 1.02% to 3,893.65 and in Frankfurt DAX index edged higher 51.48 or 0.72% to 7,201.69.

Weatherford Settles Claims with BP

Weatherford International Ltd., an equipment and service provider to oil and natural gas producing companies, said its U.S. subsidiary reached an agreement with BP plc for settlement of any claims between the companies related to the Deepwater Horizon oil spill. Weatherford provided products and services to BP for the Macondo oil well.

Under the settlement, BP will indemnify Weatherford for current and future compensatory claims resulting from the incident and the impacts from that event.

Elekta Buys Nucletron

Elekta AB, the Sweden-based human care company signed an agreement to acquire the Netherlands-based brachytherapy treatment delivery firm Nucletron for €365 million on a cash and debt-free basis. The acquisition is expected to be accretive to Elekta's cash earnings within 12 months.

Boeing Secures Order from Norwegian

Boeing Co. received an order for 15 Next-Generation 737-800 airplanes from Oslo-based Norwegian Air Shuttle ASA, commercially branded 'Norwegian'. With the latest order valued at $1.2 billion at list prices, Norwegian's direct order for 737-800s total 78.

Gainers & Losers

Aegon N.V. gained 0.8% to €4.46 after the Dutch insurer aims to grow underlying earnings before tax on average by 7% to 10% a year between 2010 and 2015. Also, the company expects to achieve a return on equity of 10% to 12% by 2015.

AstraZeneca Plc dipped 0.07% to 3,028 pence after the pharmaceutical firm entered the last lap of discussions to sell its Swedish healthcare and dental business Astra Tech to U.S.-based Dentsply International Inc. for about $1.8 billion, the Financial Times reported on Monday.

Nokia Corp. dropped 2.82% to $5.85 after the Finnish handset maker unveiled the Nokia N9 smartphone and also announced the launch of three new Series 40 mobile phones.

Syngenta AG soared 3.45% to Sfr278.60 after the Swiss agribusiness company said sales growth in the second quarter has been “robust” and that sales of key crops are expected to more than double after 2015.

The company expects revenues from key crops surpassing $17 billion after 2015, compared with $8.4 billion in the current year.