German Sentiment at 8-Month High; Spain in Focus

Arthi Gupta
26 Mar, 2012
New York City

European indexes edged higher after German sentiment improved to an eight-month high in March. The euro area leading economic index rose in February. The Italian Prime Minister Mario Monti warned that the Spanish financial situation could lead to a resurgence of the debt crisis.

[R]3:00 PM Frankfurt – European indexes edged higher after German sentiment improved to an eight-month high in March. The euro area leading economic index rose in February. The Italian Prime Minister Mario Monti warned that the Spanish financial situation could lead to a resurgence of the debt crisis.[/R]

European indexes gained after German confidence improved slightly in March but indexes were on the defensive in early trading after Italian Prime Minister Mario Monti raised doubts on Spain's financial situation and warned that the debt crisis may resurface.

Monti pushed a labor reform bill in the parliament on March 23 but pointed difficulties faced by Spain in trimming its public spending and highlighted it does not take a long start a contagion.

Finance ministers of the euro area are to meet in Copenhagen this Friday and decide on raising the euro-zone bailout fund from its current size of €500.

In Paris trading, the CAC-40 Index gained 3.04 or 0.1% to 3,479.22 and in Frankfurt the DAX Index edged higher 45.44 or 0.7% to 7.040.91.

Italian 10-year bond yields fell 0.06 percentage point to 4.99%. The 10-year Spanish government bond yields declined 0.07 percentage point to 5.34%.

Spain was in focus after the governing People’s Party failed short to gain majority in a regional election in Andalucia. The benchmark index in Spain fell 1.6% and banks were lower in Madrid trading on the worries that economic reforms may be difficult to win a parliamentary approval.

Spain’s Prime Minister Mariano Rajoy faces his first general strike on March 29 as workers protest labor law reform.

German Sentiment Rises

German business confidence rose to 109.8 in March, the highest since July 2011 from the revised 109.7 in February, survey data from the Munich-based Ifo institute showed today.

The current conditions index remained unchanged at 117.4 in March.

Euro-zone Leading Index Up

The Conference Board leading economic index for the euro area increased 0.8% to 105.2 in February from the 1.1% rise in January.

The coincident index, which measures the current economic situation, fell 0.1% to 102.4 in February.

Gainers & Losers

AstraZeneca plc fell 0.2% to 2,833.50 pence after the biopharmaceutical company said that the US District Court denied the company's request for a preliminary injunction application against the drug regulatory agency and dismissed the lawsuit without prejudice.

Basler AG dropped 0.7% to €12.90 after the manufacturer of high-quality cameras said total turnover for fiscal year 2011 increased 8% to €55.10 million from €51.0 million reported for the previous year.

HSBC Holdings Plc declined 0.5% to 555.70 pence after the banking and financial services organizations confirmed that may sell its retail and wealth management operations in Mauritius.

Monitise Plc edged lower 2.1% to 34.25 pence after the technology and services company agreed to acquire Clairmail Inc., a U.S. provider of mobile banking and payments solutions for $173 million or £109 million.

Pfeiffer Vacuum Technology AG soared 3.2% to €82 after the providers of vacuum solutions reported full-year 2011 total sales surged 135.6% to €519.5 million from €220.5 million in the previous year. Net income for the year gained 8.6% to €41.6 million compared to €38.3 million last year. Earnings per share declined to €4.19 from €4.40 a year earlier.