Spanish Bond Yields at 5.9%; European Markets Drop 1%

Arthi Gupta
10 Apr, 2012
New York City

The European indexes slumped after latest confidence survey showed a decline and bond yields of Spain and Italy gained for the third day in a row. French manufacturing output fell in February. STMicroelectronics plunged 5.9% after lowering its gross margin outlook.

[R]4:00 PM Frankfurt – The European indexes slumped after latest confidence survey showed a decline and bond yields of Spain and Italy gained for the third day in a row. French manufacturing output fell in February. STMicroelectronics plunged 5.9% after lowering its gross margin outlook.[/R]

European indexes slumped after latest survey of confidence in the region showed a decline and markets overlooked a surge in German exports. Latest imports data from China also dragged market sentiment and bond yields of Spain rose to a high for the year.

In Paris trading, the CAC-40 Index fell 59.16 or 1.8% to 3,260.65 and in Frankfurt the DAX Index edged lower 74.95 or 1.1% to 6,699.13.

The trading sentiment weakened after bond yields of Italy and Spain advanced and Spain reiterated its pledge to sell nationalized banks and lower its deficit to 3% of gross domestic product in 2013.

The bond yields were on the rise in the peripheral euro zone and the 10-year Spanish benchmark bond yield rose to 5.88%, the high for the calendar year. The Italian bond yields increased 16 basis points to 5.57%.

Euro-zone Confidence Slumps

Euro-zone investor confidence index slumped to -14.7 in April compared to -8.2 in March, results of a survey by the think tank Sentix showed today.

German Exports Rise

Germany's trade surplus increased to €14.7 billion in February from €11.9 billion a year earlier, data released by the Federal Statistics Office showed.

Exports increased 8.6% from a year ago to €91.3 billion in February. Imports edged higher 6.1% annually to €76.5 billion during the month.

French Production Climbs

France's industrial production rose a seasonally and working-day adjusted 0.3% on a monthly basis in February after increasing 0.2% in January, revised down from the 0.3% preliminary number.

Manufacturing output declined 1.2% in February, following a 0.1% drop in January, revised from a 0.2% growth reported earlier.

Gainers & Losers

Air France-KLM SA rose 0.3% to €3.93 after the Franco-Dutch airline reported passenger traffic for March grew 6.8% to 18.34 billion revenue-per-kilometer from 17.17 billion RPKs in the previous year. Load factor in the month increased 3.8 percentage points to 82.5% from 78.7% a year ago.

ASSA ABLOY AB fell 0.9% to SEK 199.90 after the Swedish lockmaker said it has acquired Traka Plc in the UK.

STMicroelectronics N.V. plunged 5.9% to €5.44 after the independent semiconductor company lowered its gross margin outlook.