Italy Approves

Devan Biswas
23 Dec, 2011
New York City

European markets traded higher as benchmark indexes in France and German gained more than 1%. Italy approved the austerity measures that will increase taxes and extend retirement age and cut spending by

[R]2:10 PM Frankfurt – European markets traded higher as benchmark indexes in France and German gained more than 1%. Italy approved the austerity measures that will increase taxes and extend retirement age and cut spending by €33 billion. European risk monitoring agency said downside risks in the euro zone are rising.[/R]

Stocks in European region traded higher and the benchmark indexes in Germany and France gained more than 1% after Italy’s lower house passed austerity measures of €33 billion.

Italian Chamber of Deputies approved the austerity measures that will increase retirement age for men to 66 years and for women to 62 years by 2012. The final approval on the measures also included reinstatement of a property tax on first homes and more taxes for several services.

The one month old technocratic government led by Mario Monti also sought and won confidence vote to avoid changes proposed by the large opposition party Northern League.

DAX 30 index increased 1.2% or 19.01 to 5,871.19 and CAC 40 index gained 36.44 or 1.2% to 3,108.24.

The benchmark index in Milan rose 0.5%, in Madrid added 1.1%, in Stockholm advanced 0.7% and Zurich increased 0.7%.

The euro edged up a fraction to trade at $1.3075 and traded down for the year 2.1%. Traders are still expecting the currency to dip to $1.25 to $1.20 as the downside risks to the sovereign credits in the euro zone remain elevated.

Stock Movers

Bank stocks in the euro zone were under pressure after the European Systemic Risk Board said on Thursday that the risks for the European financial system have worsened and the euro zone needs to set up its rescue fund quickly.

BNP Paribas SA decreased 8 cent to €30.16, Commerzbank declined 1 cent to €1.34 and Deutsche Bank rose 33 cents to €29.62.

Deutsche Boerse declined 36 cents to €42.09 after German stock exchange operator won U.S. anti-trust approval to purchase NYSE Euronext for $9 billion. The merger is still facing resistance from the competition authorities for the European Union.

Spain based Distribudora Internacional de Alimentacion SA increased 1 cents to 3.25 and chief executive officer Ricardo Curras told French newspaper Les Echos that French grocery sales are weak.

The Dia group said sales in France declined 6.8% in the first nine months of 2011 and where it generates 25% of its revenues.

Dia still estimated full year sales in 2011 to increase 3% and operating earnings of €540 million and Curras reiterated full-year sales increase of 7% and operating profit rise of 10% by 2013 still “achievable.”

Roche said its women’s ovarian cancer treatment medicine Avastin received European Union approval.

Swiss tour operator Kuoni said it is awaiting regulatory authorities to purchase Royal Tours based in Namibia with a turnover of Sfr1.4 million.

Fresenius Medical Care AG & Co. KGaA declined 15 cents to €51.44 after the dialysis services provider said it purchased eight privately controlled dialysis clinics in Ecuador and its local partner for Latin America and the two acquisitions will add $24.5 million in revenues.

Deutsche Bahn awarded an order for 90 new electric rail carriages for $648 million to Toronto based Bombardier. The carriages will be used by the railroad company for services in Frankfurt area.

Bombardier also won $248 million order to provide light rail vehicles and trams to Frankfurt transportation department.