European Indexes Sideways; Italian Yields Higher

Arthi Gupta
12 Apr, 2012
New York City

The European indexes traded sideways after Italy sold

[R]3:30 PM Frankfurt – The European indexes traded sideways after Italy sold €2.9 billion of 3-year bonds at higher borrowing costs. Output in the euro area improved in February and Greek jobless rate climbed in January. The International Energy Agency maintained oil demand outlook for 2012.[/R]

European indexes traded sideways after Italy sold €2.884 billion of 3-year bonds at higher borrowing costs but missed the maximum target set for the issue.

Market sentiment was mildly positive after a week of cautious trading and volatile indexes in the peripheral euro zone and Ireland was in focus after the European Central Bank executive board member Joerg Asmussen said the troubled nation can “gradually re-access markets” as early as “the next year” when the bailout funds run out at the end of 2013.

Euro-zone inflation is expected to stay above 2% in 2012, according to the editorial in the European Central Bank''s monthly bulletin.

In Paris trading, the CAC-40 Index fell 22.20 or 0.7% to 3,215.49 and in Frankfurt the DAX Index edged lower 19.23 or 0.3% to 6,655.39.

The yield on Spain’s benchmark 10 year bonds rose 1 percentage point to 5.86% and the Italian bond yields dropped 9 basis points to 5.45%.

Italian Bond Auction

Italy sold €2.884 billion of 3-year bonds at higher borrowing costs.

The Italian Treasury sold €2.884 billion of 2.5 percent BTP bonds maturing on March 2015 at a higher yield of 3.89% compared to 2.76% at the previous auction on March 14. The bid-to-cover ratio declined to 1.43 from 1.56 at the prior auction. The maximum planned amount was €3 billion.

The Treasury also sold €2 billion of bonds due in 2015, 2020 and 2023.

The Treasury raised €395 million from BTP maturing on November 2015 at a yield of 3.92%. Demand exceeded the offer by 3.26 times and also sold €687 million from BTP maturing on February 2020 and €918 million from August 2023 bonds.

Altogether, the government raised €4.884 billion in the bond auction today.

IEA Maintains 2012 Outlook

The International Energy Agency in its monthly Oil Market Report held its 2012 oil demand growth forecast steady at 0.8 million barrels per day to 89.90 mbd.

Euro-zone Output Improves

Industrial production in the euro area increased 0.5% on a monthly basis in February, after remaining flat in January, data released by statistics office Eurostat showed today. Production in the 27-member European Union edged higher 0.2% on a monthly basis in February.

Greek Jobless Rate Climbs

The Greek jobless rate rose to 21.8% in January from 14.8% a year ago, labor force survey from the Hellenic Statistics Authority showed today. In December 2011, the rate was 21.2%.

The number of unemployed totaled 1.08 million.

Gainers & Losers

Carrefour SA rose 1.3% to €16.30 after the French grocery retailer reported that its first quarter sales, including VAT with petrol, and at current exchange rates, was €22.5 billion, up 1.5% from last year.

Deutsche Lufthansa AG climbed 1.2% to €10.19 after the German aviation group reported a 7.7% growth in March traffic to 16.21 billion revenue seat-kilometers compared with last year, with available seat-kilometers rising 3.6% annually to 21.12 billion.

Gerresheimer AG dipped 0.1% to €32.18 after the German pharma and healthcare industry supplier said first quarter revenues climbed 13.6% to €268.8 million from €236.6 million in the previous year. Net income for the quarter fell 4.2% to €6.8 million or 16 cents per share compared to net income of €7.1 million or 20 cents per share the prior year.

Roche Holding AG gained 1.4% to Sfr156.50 after the Swiss drugmaker said first quarter group sales fell 1% to Sfr11.03 billion from Sfr11.12 billion last year.

Stolt-Nielsen Limited advanced 2% to NOK 104.00 after the Norwegian-Bermudean shipping and seafood company said first quarter revenue rose 10.2% to $505.7 million compared with $458.7 million in the earlier year quarter. Net profit in the quarter plunged 74.3% to $8.0 million or 14 cents per diluted share from $31.2 million or 52 cents per share in the 2011 fourth quarter.