European Indexes Down 2%; Santander Up on Profit Outlook

Arthi Gupta
30 Sep, 2011
New York City

European indexes declined after inflation in September rose and the German retail sales declined 2.9%. China

[R]1:30 PM Frankfurt – European indexes declined after inflation in September rose and the German retail sales declined 2.9%. China’s manufacturing contracted for the third month in a row. Hochtief’ subsidiary Leighton sold parts of Australian iron ore business to BHP for €512 million.[/R]

European indexes slumped after China''s manufacturing activity contracted for the third straight month in September and German retail sales declined the most since 2007.

China''s purchasing managers'' index was 49.9 in September, unchanged on August, but higher than the flash estimate of 49.4, final results from Markit Economics showed today.

German Retail Sales Drop

German retail sales fell 2.9% on a monthly basis in August following a 0.3% increase in July, according to the latest data out today from the Federal Office of Statistics.

In Paris, CAC-40 Index slumped 63.51 or 2.1% to 2,964.14 and in Frankfurt DAX Index edged lower 166.39 or 2.9% to 5,471.41.

For the week, the CAC-40 Index surged 5.5% and the Frankfurt DAX Index soared 5.4%.

Euro-zone Inflation Rises, Jobless Rate Flat

Euro-zone annual inflation rose to 3% in September from 2.5% in August, according to a flash estimate from Eurostat.

Separately, the jobless rate in the euro-zone held steady at 10% in August for a third successive month, data published by Eurostat showed.

Hochtief Subsidiary Sells Parts of Australian Iron Ore Business

Hochtief’s subsidiary Leighton sold parts of its Australian iron ore business at a substantial profit. The company today disposed of several projects undertaken by its subsidiary HWE Mining in the Pilbara region to the mining group BHP Billiton for the equivalent of €512 million or A$705 million.

Gainers & Losers

Alstom SA fell 2.3% to €24.83 after the engineering group said it won a €400 million contract to develop and produce electric locomotives in Russia.

Banco Santander, S.A surged 6.3% to $8.41 after the Spanish lender said it expects profit to return to normal in three years and sees a profit growth in the years 2012 and 2013.

For the full year 2010, the attributable profit to the group was €8.18 billion or €0.9356 per share and net interest income was €29.22 billion.

GEA Group AG plunged 6.5% to €17.49 after the provider of process technology and components for food and energy industries said it sold its packaging materials unit CFS Kempten GmbH to Conflex Packaging GmbH.

Nokia Corporation declined 1.8% to €4.19 after the Finnish mobile phones maker completed the transaction to outsource its Symbian software development and support activities to Accenture.

Koninklijke Philips Electronics N.V., the Dutch electronics maker slumped 6.6% to €13.19 after HSBC cut its earnings forecasts for the company.

Statoil ASA soared 3.2% to NOK 126.70 after the integrated energy company confirmed a significant upside potential in the Avaldsnes discovery in production licence PL501. Statoil holds a 40% equity interest in PL501.