China Worries Drag European Indexes; Spain Sells

Arthi Gupta
20 Mar, 2012
New York City

European indexes fell after economic slowdown in China begins to register in latest data. Greece received the first tranche of new bailout aid. Spain raised

[R]3:30 PM Frankfurt – European indexes fell after economic slowdown in China begins to register in latest data. Greece received the first tranche of new bailout aid. Spain raised €5.044 billion in a bond auction as yields dropped. German producer price index fell and UK inflation eased in February.[/R]

European indexes edged lower more than1.2% after China raised retail gasoline and diesel prices between 6% and 7% and auto sales are likely to trail the current year forecast.

Greece received the first €7.5 billion of aid from its new EU/IMF bailout, government officials said today.

""We received €5.9 billion from the euro-zone and €1.6 billion from the IMF,” a Finance Ministry official told Reuters.

Spain raised €5.044 billion in an auction of 12- and 18-month bonds today at lower borrowing costs.

In Paris trading, the CAC-40 Index fell 43.81 or 1.2% to 3,534.04 and in Frankfurt the DAX Index edged lower 93.45 or 1.3% to 7,061.03.

Italian 10-year yields rose 4.2 basis points to 4.88%. The equivalent Spanish yield climbed 4 basis points to 5.21%.

Spanish Debt Auction

Spain raised €5.044 billion in an auction of 12- and 18-month bonds today at lower borrowing costs.

The Treasury sold €3.6 billion of 12-month bonds due in March 2013 at a yield of 1.417% compared to 1.899%, at the previous auction on February 14. The bid-to-cover ratio declined to 2.1 from 2.27 previously.

The Treasury raised €1.45 billion in 18-month notes at a yield of 1.711%, lower than the 2.308% a month ago. The bid-to-cover ratio was 2.9 compared to 2.88 in the last auction.

German PPI Drops

Germany''s producer price index increased 3.2% annually in February compared to the 3.4% rise in January, data from the Federal Statistics Office showed today. The latest data is the lowest annual rate since June 2010, when inflation rate was 1.7%, the agency said.

UK Inflation Eases

The UK consumer price annual inflation eased to 3.4% in February from 3.6% in January, data from the Office for National Statistics showed today. The broadest measure of inflation was the lowest level since November 2010.

From a month ago, consumer prices climbed 0.6% in February after a 0.5% drop in January.

Gainers & Losers

Koninklijke Philips Electronics N.V. fell 1.2% to €16.07 after the Dutch consumer electronics maker targeted mid-term 2013 sales growth between 4% and 6%, operating earnings increase between 10% and 12% and return of capital between 12% to 14%.

Kuoni Reisen Holding AG soared 4.4% to Sfr329.25 after the Swiss travel group reported full year 2011 turnover increased 28% to Sfr5.11 billion from Sfr3.98 billion in the previous year. Net profit for the year increased 44% to Sfr33.3 million from Sfr23.2 million the prior year.

Leoni AG slumped 3.6% to €36.67 after the manufacturer and supplier of wires, optical fibers, cables and cable systems said fiscal year 2011 consolidated sales rose 25.2% to €3.7 billion from €2.96 billion in the previous year: Consolidated net income for the year surged 132.1% to €156 million compared to €67.2 million last year.

Metro AG rose 1.5% to €31.33 after the German retailer reported fiscal year 2011 sales declined 0.8% to €66.7 billion from €67.3 billion the previous year. Net profit for the year dropped 26% to €631 million or €1.93 per share from €850 million or €2.60 per share last year.

Rio Tinto plc declined 3.5% to 3,487 pence after the mining group priced $2.5 billion of fixed rate bonds with a weighted average coupon of 2.97% and a weighted average maturity of 11.6 years.