European Markets Advance; Vodafone, Soc Gen, Repsol in Focus

Devan Biswas
08 Nov, 2011
New York City

European markets advanced after investors focused on domestic earnings. Societe Generale third quarter earnings decline on Greek bonds write down and the French bank suspended its dividend. Italian bond yields surged near 7%.

[R]4:30 PM Frankfurt – European markets advanced after investors focused on domestic earnings. Societe Generale third quarter earnings decline on Greek bonds write down and the French bank suspended its dividend. Italian bond yields surged near 7%.[/R]

Market indexes in European trading jumped as investors focused on corporate earnings and economic data. However bond market was tense ahead of the key vote in Italy.

In Paris, the CAC-40 Index added 74.43 or 2.4% to 3,178.08 and in Frankfurt the DAX Index increased 141.35 or 2.4% to 6,070.03.

The indexes in Stockholm rose 1.1%, in Madrid added 1%, in Milan surged 2.6% and in Zurich edged up 1.2%. The index in Athens added 2.5% and in UK traded up 1.7%.

Greece is expected to have a new prime minister by the end of the day that will lead a coalition government before the election as early as February next year.

Yields on 10-year Italian bonds increased to 6.74% before falling back to 6.65% and the spread with the German bunds increased to 4.9%.

The bond market yield have risen sharply in the last three months as the shaky governing coalition lose members in Italy and neither dominant party wants to take responsibility to implement tough austerity measures demanded by the international lenders.

German bunds declined 35 ticks to 1.81% after seasonally adjusted exports rose in September 0.9%.

Gainers & Losers

Adecco SA declined 5% to Sfr37.83 after the temporary staffing company said its sales in the North American region declined 6.6% to €903 million.

Vodafone Group plc gained 3% to 177.73 pence after the UK based mobile phone services provider said first half operating earnings increased 2.3% to £7.53 billion and estimated full-year adjusted operating earnings of £11.4 billion.

Commerzbank traded unchanged at €1.64 and a day ago the German bank reported third quarter operating loss of €855 million compared to €116 million a year ago quarter.

Deutsche Bank AG increased 2.8% to €29, BNP Paribas SA added 4.5% to €32.15 and Societe Generale SA soared 10% to €19.17.

Societe Generale soared after the French bank said third quarter net declined 31% to €662 million from €896 million a year ago. The earnings declined after the bank decided to write down the Greek sovereign bonds by €333 million.

Intesa Sao Paolo SpA increased 7 cents to €1.23 and UniCredit SpA increased 3 cents to 83 cents.

Italian bank Intesa reported third quarter net declined to €527 million from €741 million in the quarter a year ago. The bank also confirmed that its core tier 1 ratio was 10.2% at the end of the quarter.

HSBC Holdings plc increased 6.30 pence to 541.40 pence and Barclays fell 1.1 pence to 184.35 pence.

Repsol YPF SA increased 5.5% to €22.03 after it said its Argentina based YPF unit increased the estimate of shale oil in Patagonia to 927 million barrels of shale oil.

BMW AG increased 3.2% to €60.10, Volkswagen AG increased 1.7% to €118.50 and Daimler AG added 69 cents to €35.28.

Novo Nordisk A/S gained 3.2% to DKK613 after two competitors in a joint venture dissolved a decade old partnership to develop diabetic treatment drug. Amylin Pharmaceuticals Inc and Eli Lilly & Co decided to terminate their joint venture.

Prudential Plc increased 4% to 644 pence after the UK based insurer said revenues in the first nine months increased 10% to £2.7 billion from a year ago period.

Llyods Banking Group soared 7.6% to 29.75 pence after the UK based troubled insurer said its bad loan loss provision declined in the third quarter.