European Markets Sideways; Carnival Plunges 17%

Bikram Pandey
16 Jan, 2012
New York City

European indexes traded sideways and focused on the meetings of politicians in the region ahead of EU summit later in the month. The talks between Greece and lenders are expected to resume midweek. France Telecom agreed to sell its stake in Orange Austria. Carnival plunged 17%.

[R]5:00 PM Frankfurt – European indexes traded sideways and focused on the meetings of politicians in the region ahead of EU summit later in the month. The talks between Greece and lenders are expected to resume midweek. France Telecom agreed to sell its stake in Orange Austria. Carnival plunged 17% after its cruise ship ran aground off the coast of Italy.[/R]

European markets traded sideways and focused on the meeting of leaders in the region this week and on the region summit at the end of the month.

The euro traded lower against the yen and declined to an 11-year low to 97.25 as investors largely ignored the latest opinion revision from the Standard & Poor’s.

Investors focused on the stalled talks between Greek government and three international lending groups to avoid a disorderly default as Greece demands more than 50% reduction in repayment to bond holders.

Greek leaders and the troika of lenders are scheduled to resume talks on Wednesday.

German government spokesperson said that bailout fund for the euro zone has sufficient capital to “fulfil its current obligations.” The spokesman from the finance ministry also confirmed that the finance ministers in the region are expected to conclude the discussion next week to set up the permanent mechanism.

DAX 30 index increased 20.28 or 0.3% to 6,163.36 and CAC 40 index edged lower 0.54 to 3,195.95. The euro traded 0.1% lower to $1.2667 and dropped to an 11-year low to 97.27 in Tokyo trading. The euro traded up against the Swiss franc to 1.209.

Across the region market indexes traded mixed. Market index in Milan declined 0.2%, in Madrid fell 0.7% and in Athens jumped 0.6%.

Several European leaders are scheduled to meet before the EU summit at the end of this month. French President Nicolas Sarkozy is scheduled to meet Spanish Prime Minister Mariano Rajoy and Italian Prime Minister Mario Monti is scheduled to meet UK’s Prime Minister David Cameron in London on Wednesday.

The meeting of German Chancellor Angela Merkel and Nicolas Sarkozy with the Italian Prime Minister Monti in Rome was postponed from Jan 20 to the end of February.

Stock Movers

Carnival plc dropped 16.8% or 377 to 1,872 pence after a passenger cruise controlled by the company sank off the coast of Italy and injured at least 60 people and three people are dead so far.

Deutsche Bank AG increased 38 cents to €29.08, Societe Generale increased 10 cents to €16.46 and Intesa Sanpaolo SpA traded flat at €1.24. Natixis SA declined 3 cents to €2 and the company plans to cut at least 110 positions in the U.S. investment banking unit according to media reports in France.

Daimler AG increased €1.77 to €39.44 and BMW added €1.78 to €59.82. Peugeot SA increased 43 cents to €13.98 and Renault SA gained 83 cents to €30.82.

Daimler rose after the company is reported to launch four new compact vehicles in the next three years in the U.S. and expect sales to increase 20%, according to an article in Automotive New Europe.

SAP AG increased 74 cents to €43.57 and Siemens AG increased €1.07 to €76.17.

Royal Dutch Shell traded up 65 pence to 2,257.50, Eni SpA increased 4 cents to €16.33 and Total SA increased 89 cents to €39.90.

BASF SE increased 76 cents to €57.82 and Vinci SA increased 12 cents to €35.16.

Unilever N.V. increased 21 cents to 25.68 and Beiersdorf AG added 21 cents to 42.98.

Deutsche Telekom AG increased 2 cents to €8.87 and France Telecom SA increased 1 cent to €11.68 after it agreed to sell its 35% stake in Orange Austria to Hutchison Whampoa Ltd controlled Hutchison 3G. France Telecom also sold its stake in mobile network in Switzerland to a private equity group.

Deutsche Lufthansa AG increased 15 cents to €9.24 and Air France KLM added 11 cents to €4.35.

Douglas Holding AG dropped as much as 2% to €31.35 after Welt am Sonntag reported that the perfume and makeup retailer is looking to go private.

UK retailers retreated in London trading and Tesco Plc declined 1.2% to 312 pence after a report in London newspaper cited chief executive officer Philip Clarke and noted that the company plans to spend as much as 400 million pounds to modernize its UK stores. William Morrison Supermarkets Plc traded up 0.3% to 288 pence.