European Indexes Soar 1.7%; Philips to Buy Indal

Arthi Gupta
29 Jun, 2011
New York City

The European indexes traded higher ahead of austerity vote in the Greece. The EU officials stepped up media campaign in the support of austerity measures. Euro-zone economic sentiment index fell to 105.1 in June. Philips agreed to acquire Indal. Japan-based Kyocera agreed to buy Unimerco.

[R]2:00 PM Frankfurt – The European indexes traded higher ahead of a austerity vote in the Greece. The EU officials stepped up media campaign in the support of austerity measures. Euro-zone economic sentiment index fell to 105.1 in June. Philips agreed to acquire Indal. Japan-based Kyocera agreed to buy Unimerco.[/R]

World stocks traded higher on optimism that the Greek parliament will vote in favour of the unpopular austerity measures. Several opposition lawmakers and government workers unions are opposed to the €28 billion austerity measures and a €50 billion privatization plan.

Greece is facing 6 billion euros bonds repayment in August and also facing budget shortfall as early as July.

European Union officials stepped up media pressure on the Greek Prime Minister George Papandreou and lawmakers to pass austerity measures.

The only way to avoid an immediate default is for the Greek Parliament to endorse the austerity programme that includes medium-term fiscal strategy and privatization measures, European Union Economic and Monetary Affairs Commissioner Olli Rehn warned on Tuesday.

In a statement, the EU top official said, """"They must be approved if the next tranche of financial assistance is to be released.""""

""""To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default.""""

In addition, Bank of Greece Governor George Provopoulos said it would be ''suicide'' if the government fails to pass the austerity measures in parliament on Wednesday in an interview with the publisher of Skai Television and Kathemerini newspaper.

Provopoulos expressed concern that Greek politicians had played down the crisis over the past 18 months, which has eventually led towards a possible default.

Euro-zone economic sentiment index fell to 105.1 in June, from 105.5 in May, survey results from the European Commission showed.

Industrial output in Japan rose a seasonally adjusted 5.7% on a monthly basis in May, according to a report released by Japan''s Ministry of Economy, Trade and Industry.

In Paris CAC-40 Index gained 73.34 or 1.90% to 3,925.88 and in Frankfurt DAX index edged higher 124.24 or 1.73% to 7,294.67.

IMF Selects Lagarde

The International Monetary Fund appointed French Finance Minister Christine Lagarde as the next managing director by a consensus vote. Lagarde in the past has been critical of the banks to plan allocate more loans to emerging nations.

The IMF has become the tool of European politicians to control funding to developing nations and yet to appoint its head from emerging markets. The multilateral agency has been perceived widely around the world as the bank controlled by the Europeans and the World Bank by the U.S.

Philips Acquires Indal

Royal Philips Electronics NV, the Dutch consumer electronics maker agreed to acquire Grupo Indal, the Spanish professional luminaries firm for an undisclosed amount.

Kyocera Buys Unimerco

Kyocera Corporation’s wholly-owned Germany-based subsidiary Kyocera Fineceramics GmbH acquired the Denmark-based industrial cutting tool manufacturing and sales company Unimerco Group A/S for about 20 billion yen or $247 million, aiming to boost its sales in Europe.

KFG will acquire 100% ownership of shares of Unimerco to strengthen its cutting tool business in Europe.

Gainers & Losers

ACE Ltd. dipped 0.03% to $64.71 after the Swiss property and casualty insurer stated that ACE Insurance will integrate its two Malaysian operating units, ACE Synergy Insurance Berhad and Jerneh Insurance Berhad.

Commerzbank AG surged 3.19% to €2.97 after the German lender aims to grow its credit business with smaller companies in the renewable-energy sector to about €5.5 billion by the end of the year, Handelsblatt reported.

Credit Suisse Group AG gained 1.32% to Sfr32.30 after the financial services company is expected to cut 600 investment-banking jobs after the continuous suffering from weak trading activities during the second quarter, according to the Wall Street Journal.

Nestlé SA rose 0.19% to Sfr51.60.

Volkswagen AG climbed 1.49% to €143.20 after the automaker said it would build two new manufacturing plants in China. Each of the plants will have an annual capacity of 300,000 vehicles and production will start in 2013.