World Bankers Talk Crisis Again, Nestl

Arthi Gupta
20 Apr, 2012
New York City

The European indexes pared gains after trading higher in the day after German business sentiment improved unexpectedly in April. The UK retail sales rose in March. International Airlines Group completed the acquisition of bmi from Lufthansa.

[R]1:00 PM Frankfurt – The European indexes pared gains after trading higher in the day after German business sentiment improved unexpectedly in April. The UK retail sales rose in March. International Airlines Group completed the acquisition of bmi from Lufthansa.[/R]

The European indexes traded lower but in early morning stocks made a feeble advance after German business sentiment unexpectedly improved in April. Yesterday, Spain completed the debt auction but at higher borrowing costs and French auction drew weaker than expected response.

Nestlé said total sales increased on emerging markets performance and International Airlines Group completed the acquisition of bmi from Lufthansa.

Finance ministers and central bankers from the leading 20 economies are gathering in Washington, D.C. to discuss the global economies and tackle the rising tensions in the euro zone sovereign debt markets. International Monetary Fund ahead of the meeting said it secured additional funds of $320 billion to bolster its lending capacity to the euro zone.

The IMF move to bolster its capital to facilitate the lending to euro zone is in stark contrast to its posture at the time of Asian crisis when Indonesia, Thailand and Malaysia came under heavy pressure after a run on their currencies.

In Paris trading, the CAC-40 Index declined 8.27 or 0.3% to 3,165.75 and in Frankfurt the DAX Index edged higher 6.00 or 0.1% to 6,676.23.

For the week, the CAC-40 Index is set to decline 0.7% and the DAX Index is close to advancing 1.4%.

The yield on Spain’s benchmark 10-year bonds rose 10 basis points to 5.97% and the Italian bond yields increased by the same to 5.68%.

The European Commission cleared the proposed acquisition of Synthes Inc., the Swiss medical device maker by Johnson & Johnson.

Johnson & Johnson had agreed a year ago to acquire Synthes for Sfr159 a share or $21.3 billion to expand its orthopaedics business.

German Sentiment Improves

German business sentiment index based on a monthly survey of some 7,000 companies improved unexpectedly to 109.9 in April from 109.8 in March, the Munich-based Ifo institute said today.

The current conditions index was at 117.5 and the expectations index reading was 102.7 in April.

Separately, Germany's producer price inflation rose to 3.3% on an annualized basis in March from 3.2% in February, data from the Federal Statistics Office showed.

From a month ago, producer prices rose 0.6% in March compared to the 0.4% rise in February.

UK Retail Sales Rise

UK retail sales, including automotive fuel grew 1.8% from a month ago in March, data from the Office for National Statistics showed. Annually, retail sales rose 3.3%.

Retail sales, excluding automotive fuel rose 1.5% on a monthly basis in March and advanced 2.8% from the previous year.

Gainers & Losers

Iberdrola SA, the company principally engaged in the energy sector climbed 0.5% to €3.50 after a broker upgrade.

International Consolidated Airlines Group, S.A. rose 0.6% to 170.70 after the holding company completed the acquisition of bmi from Lufthansa.

Man SE fell 0.6% to €101.70 after the German mechanical engineering company stated first quarter revenues increased slightly to €3.8 billion from last year. Operating profit for the quarter declined 20% to €250 million from the prior year.

Nestlé S.A. dipped 0.5% to 56.90 Swiss francs after the food maker reported first quarter total sales increased 5.6% to 21.39 billion francs from 20.26 billion francs last year.

Schneider Electric S.A. declined 1.2% to €46.85 after the energy management company reported first quarter sales improved 9.4% to €5.41 billion and comparable sales edged up 0.4%.

Suez Environnement Co SA climbed 0.6% to €10.38 after the French water treatment and waste management firm said first quarter revenues grew 2.2% to €3.59 billion from €3.51 billion a year ago.