Spain Sells

Arthi Gupta
17 Apr, 2012
New York City

The European indexes rose after Spain raised

[R]1:30 PM Frankfurt – The European indexes rose after Spain raised €3.18 billion in debt auction and German sentiment improved to a two-year high in April. UK annual inflation rose in March. Repsol slumped after Argentina nationalized energy company YPF SA.[/R]

The European indexes rose after German confidence rose to a two-year high and the borrowing cost at the latest Spanish debt sale of €3.18 billion fell. Argentina nationalized the domestic oil company controlled by Spain based Repsol.

Yesterday, traders were rattled after Spanish 10-year government bond yields rose above the psychologically important 6% mark.

In Paris trading, the CAC-40 Index climbed 43.44 or 1.4% to 3,248.72 and in Frankfurt the DAX Index edged higher 75.94 or 1.1% to 6,701.30.

The yield on Spain’s benchmark 10 year bonds declined six basis points to 5.97% and the Italian bond yields fell three basis points to 5.54%.

Spanish Bond Auction

The Spanish Treasury raised €3.18 billion from the issue of 12 and 18 month Treasury bills today at higher yields and more than the top end of the €2 billion to €3 billion target range.

Spain sold €2.09 billion of 12-month bills at an average yield of 2.623% compared to 1.418% in the prior auction on March 20. The bid-to-cover ratio was 2.9 compared with 2.14 times last month.

The Treasury also sold €1.09 billion of 18-month bills at an average yield of 3.11% compared with 1.711% last month. The bid-to-cover ratio was 3.8 compared to 2.93 in the last auction.

Euro-zone Inflation Revised Up

Euro-zone annual inflation for March was revised up to 2.7% from 2.6%, final data from Eurostat showed. The rate was 2.7% in February.

Inflation continues to stay above the European Central Bank''s ''below, but close to 2 percent'' target.

UK Annual Inflation Rises

UK annual inflation rose 3.5% in March from 3.4% in February, the Office for National Statistics showed today

Retail price inflation fell 3.6% annually in March, from 3.7% in February.

German Sentiment Climbs

Germany''s economic sentiment rose to 23.4 in April from 22.3 in March, the Mannheim-based Centre for European Economic Research said today.

The indicator assessing the current economic situation rose to 40.7 in April from 37.6 in the previous month.

Gainers & Losers

Groupe Danone SA rose 2.8% to €53.02 after the French dairy firm reported first quarter sales rose 7.6% to €5.12 billion from €4.76 billion a year earlier and comparable increased 6.9%.

Repsol YPF SA slumped 5.8% to €16.47 after the Spain-based integrated oil and gas company said the Argentinean government took control of YPF SA. With this, 51% of YPF''s Class D shares owned by Repsol will be declared of public interest and subject to expropriation.

Repsol owns a 57.43% stake in Argentina focused energy company YPF, with a book value of €4.122 billion as of December 31, 2011.

Rio Tinto plc dipped 0.4% to 3,425.50 pence after the miner reported first quarter iron ore production increased 9% to 45.64 million tons from 41.88 million tons last year.

Wirecard AG fell 0.7% to €14.19 after the electronic payment company said fiscal year 2011 consolidated revenues increased 19.6% to €324.8 million and earnings per share soared 13.2% to €0.60.

Wincor Nixdorf AG plunged 8.1% to €31 after the IT solutions provider to retailers and retail banking estimated operating profit for the fiscal year to contract significantly to around €100 million compared to an operating profit of €162 million in the prior year.