European Markets Resume Losses; Holcim Net Falls 13%

Arthi Gupta
18 Aug, 2011
New York City

European indexes slumped on sovereign debt concerns and the weak economic outlook. Ratings agency confirmed France''s AAA rating and stable outlook. Holcim plunged 7% after quarterly sales and net declined. SBM Offshore swung to loss in the first-half.

[R]2:20 PM Frankfurt – European indexes slumped on sovereign debt concerns and the weak economic outlook. Ratings agency confirmed France''s AAA rating and stable outlook. Holcim plunged 7% after quarterly sales and net declined. SBM Offshore swung to loss in the first-half.[/R]

The European markets faced accelerated sell-off by the mid-day trading as investors’ fears mount on the growing possibilities of another economic decline. The market indexes in Europe dropped more than 2% and markets in Asia decline more than 1%.

The European markets resumed their slides today after a meeting between the leaders of France and Germany failed to produce any new specific steps to resolve the growing debt problem in the euro-zone. Investors are also nervous about the U.S. economic slowdown and the focus on debt reduction that will cut more government spending.

Rating agency Standard & Poor''s today confirmed France''s AAA rating and stable outlook. The agency is confident that the country would maintain its top rating held since 1975.

The Federal Reserve Bank of New York is intensifying its scrutiny of the U.S arms of many European banks, amid concerns that the banks are facing funding difficulties; the Wall Street Journal reported but did not say where it got the information.

Austrian finance ministry spokesman Harald Waiglein told Finnish daily Helsingin Sanomat Vienna will seek specific loan collaterals from Greece if Finland secures guarantees.

""The guarantee model must be open to all eurozone states. We intend to find out whether this is so,"" he said.

European Central Bank Governing Council member Ewald Nowotny said in an interview with Austria''s Wirtschaftsblatt that the euro area is likely to face a prolonged period of low growth coupled with low inflation.

In Paris CAC-40 Index slumped 86.01 to 2.64% to 3,168.42 and in Frankfurt DAX Index plunged 207.58 or 3.49% to 5,741.36.

Japan recorded a trade surplus of 72.5 billion yen in July compared to a surplus of 68.6 billion yen in June. Exports fell 3.3% from a year ago compared to a 9.9% rise in imports.

Germany Employment Rises

Germany''s employment increased 1.4% from a year ago in the second quarter, the same pace as in the first quarter, Destatis said.

Gainers & Losers

Basilea Pharmaceutica AG fell 2.92% to Sfr48.15 after the Swiss drugmaker reported first-half product sales from Toctino increased 11% from last year to Sfr15 million. Net loss in the period narrowed 19% to Sfr20.2 million or 2.10 francs per share compared to a net loss of Sfr24.9 million or 2.60 francs per share a year earlier.

Basler AG declined 2.12% to €11.98 after the company that develops, manufactures and sells machine vision technology said first-half group''s sales increased 24% to €28.1 million, from €22.6 million in the prior-year period. Earnings before taxes for the period rose 50% to €3.3 million from €2.2 million last year.

Holcim Ltd. plunged 6.68% to Sfr44.68 after the cement maker reported second quarter sales declined 11% to Sfr5.49 francs from Sfr6.16 a year earlier but like-for-like sales climbed 2.9%. Net income in the quarter fell 13% to Sfr347 million from Sfr399 million.

Nokia Corp. fell 1.02% to €4.09 after the Finnish mobile phone maker and the company released its latest smartphone operating system.

SBM Offshore N.V. dipped 0.97% to €13.82 after the Dutch oil-services company said first-half revenue grew 5.8% to $1.46 billion from $1.38 billion in the same period last year. Loss in the period was $265.33 million or $1.55 per share versus profit of $77.6 million or $0.47 per share last year.

voestalpine AG slumped 5.31% to €27.08 after the Austria-based steel materials producer reported first quarter revenue rose 19.4% to €3.05 billion from €2.56 billion in the same quarter last year. Profit for the period surged 73% to €209.6 million or 1.13 euros per share from €121.1 million or 0.60 euros per share a year ago.