European Indexes Higher Ahead of Greek Decision; TNT Rejects UPS Bid

Arthi Gupta
20 Feb, 2012
New York City

European indexes gained on optimism that euro area leaders will sanction the entire

[R]1:00 PM Frankfurt – European indexes gained on optimism that euro area leaders will sanction the entire €130 billion bailout for Greece.China lowered the reserve requirement ratio for large banks by 50 basis points. TNT Express soared 55% after rejecting a $6.43 billion takeover bid from UPS.[/R]

European markets traded higher on the optimism that the euro zone ministers will approve the bailout for Greece and the European Central Bank will also participate.

Greece is struggling to convince ministers that it will abide by the conditions of the bailout and will not seek to change terms after the general election as early as April.

However, the mood in Brussels is cautious before the meeting and ministers are pushing for the release of only €30 billion of the €130 billion. Greek Prime Minister Lucas Papademos has flown to Brussels for the crucial meet.

European Central Bank Executive Board member Joerg Asmussen reportedly said in an interview to the Financial Times Deutschland that the total size of the European Stability Mechanism could be increased to €750 billion by using the €250 billion untapped funds from the European Financial Stability Fund.

China Lowers Reserve Requirement Ratio

The People's Bank of China decided to lower the banks' reserve requirement ratio by 50 basis points, effective February 24, to 20.5% for large commercial banks, according to a statement published on its Web site on February 18.

In Paris trading, the CAC-40 Index gained 28.88 or 0.8% to 3,468.23 and in Frankfurt the DAX Index edged higher 96.47 or 1.4% to 6,944.36.

Italy’s 10-year yield fell nine basis points to 5.49% and the Spanish 10-year yield declined six basis points to 5.19%.

French Sentiment Stable

France's business confidence remained unchanged in February according to the survey results from the statistics office Insee today.

French business sentiment index stood at 92 in February, the same level as in January, Insee said. The January index was revised to 92 from 91 previously.

Gainers & Losers

Ageas SA fell 1.1% to €1.70 after the insurance company reported total income for the fourth quarter rose 30.3% to €3.96 billion compared to €3.04 billion in the prior-year quarter.

Carlsberg A/S rose 1.6% to 435.80 kronor after the Danish brewing company reported fourth quarter net revenue increased 11% to 14.85 billion kronor from 13.4 billion kronor the prior year. Net profit in the quarter surged 189% to 912 million kronor from 316 million kronor a year earlier. Quarterly earnings per share rose to 6 kronor from 2.1 kronor in the previous year.

Further, the company proposed a 10% increase in 2011 dividend to 5.50 kronor per share.

Rio Tinto Plc soared 3.2% to 3,738.50 pence after the miner announced an investment of $518 million in autonomous trains for Pilbara iron ore rail network in Western Australia.

TNT Express N.V. soared 54.6% to €9.80 after the package-delivery company rejected a $6.43 billion takeover bid by U.S.-based United Parcel Service.

Transocean Ltd. plunged 6.1% to Sfr43.11 after the offshore contract drilling services provider for oil and gas wells announced that the company expects its fourth quarter 2011 results to include a non-cash charge related to the impairment of a substantial portion of the goodwill associated with its contract drilling services reporting unit.