European Markets Slide; Barclays Rise, Total and Saab Fall

Devan Biswas
10 Feb, 2012
New York City

European markets traded lower after the euro zone finance ministers set more conditions for Greece before releasing the next bailout funds. Saab declined 9% after quarterly orders were below expectations. Barclays accelerated plans to cut expenses and trim bonuses.

[R]4:30 PM Frankfurt – European markets traded lower after the euro zone finance ministers set more conditions for Greece before releasing the next bailout funds. Saab declined 9% after quarterly orders were below expectations. Barclays accelerated plans to cut expenses and trim bonuses.[/R]

European markets backtracked Friday as investors as euro zone finance ministers delayed ratifying the agreement between Greece and international lenders and more conditions before releasing the next bailout funds.

Jean-Claude Juncker chair of the Eurogroup said Greek parliament must approve the agreement this weekend, three political parties must back the implementation of the reforms and Greek government must find additional cost cuts of €325 million.

The agreement with lenders is resisted by far right conservative party and two labor unions. Greece was paralyzed with a two-day strike that shut down transportation network, schools and courts and government offices but airports were open.

Greek leaders are resisting the approval of the measures ahead of elections that are likely to take place as early as April, however interim government is confident that the measures will pass the parliament vote on Sunday or Monday.

In London, FTSE 100 index traded lower 0.7% or 42.80 to 5,853, in Frankfurt DAX 30 index declined 1.6% or 109.8 to 6,679 and in Paris CAC 40 index decreased 1.3% or 43.5 to 3,381.

For the week, CAC 40 index declined 1.3%, the DAX dropped 0.9% and the FTSE 100 index fell 0.7%.

Mining and resources linked stocks were on the defensive after China reported a decline in January imports.

The euro edged lower 0.6% to $1.3199 and declined 0.2% against the yen to 102.66 as Japanese Finance Minister Jun Azumi said the exchange rate does not reflect economic reality and the government is ready to counter speculation.

Stock Movers

Banks traded lower in Athens, Frankfurt and London.

National Bank of Greece declined more than 10% to €2.65, Alpha Bank SA dropped 14% to €1.37 and EFG Eurobank Ergasias SA plunged 12.8% to 8.41 cents.

Commerzbank AG dropped 6% to €2.06 on the Greek worries.

Barclays gained 3% to 240.31 pence after the bank said it plans to cut 2 billion pounds of expenses by 2013 and limit the revenues set aside for bonuses to 32% from the previous high of 50%. The pretax profit declined 3% from a year ago to 5.9 billion pounds.

Full year profit attributable to shareholders declined to 3 billion pounds from 3.56 billion pounds in 2010. The bank reported stronger performance at its British retail and corporate units against the weak performance at its investment banking unit.

In the last quarter net income declined 19% from the previous quarter to 1.8 billion pounds.

Total SA declined 1.3% to €40.65 after the French state controlled oil explorer reported adjusted net income in the fourth quarter of €2.73 billion and lower capital expenditure in the year to $20 billion from $22 billion in 2011.

Cable & Wireless Plc dropped 11% to 38.50 pence after the telecom operator said its operating earnings at its Panama based unit will be lower than estimated on rising competition in the region.

Saab dropped more than 9% to 135.5 kronor after the Swedish defense contractor reported fourth quarter net income of 413 million kronor. The stock plunged to 16% as the company declared its results and orders in the quarter plunged to 5.11 billion kronor from 11.9 billion kronor a year ago.