Italy Approves

Arthi Gupta
06 Jul, 2012
New York City

The European indexes dipped. SGS agreed to acquire Belgium-based Exprimo. Peugeot slumped after an annual decline in first-half worldwide sales.

[R]1:30 PM Frankfurt – The European indexes dipped. SGS agreed to acquire Belgium-based Exprimo. Peugeot slumped after an annual decline in first-half worldwide sales.[/R]

European markets edged lower a day after central banks in Europe, UK and China delivered additional monetary steps to boost their economies, as expected.

ECB President Mario Draghi told reporters on Thursday that economic growth in the euro area continues to remain weak, with heightened uncertainty weighing on confidence and sentiment.

Draghi lowered the rates to historic low in the euro zone and added that the risks surrounding the economic outlook for the euro area continue to be on the downside.

The Italian government approved €4.5 billion in spending cuts for this year and also plans to save €10.5 billion in 2013 and €11 billion in 2014 by reducing expenditure.

A total of €26 billion or $32 billion in savings is estimated over three years and will be achieved mainly through 20% cut in the number of public sector managers, 10% reduction in other public sector staff, limiting health care expenditure, and better allocation of human resources and materials to public administrations.

In Paris trading, the CAC-40 Index declined 9.87 or 0.3% to 3,219.49 and in Frankfurt the DAX Index edged lower 30.66 or 0.5% to 6,504.91.

For the week, the CAC-40 Index rose 0.7% and the DAX Index soared 6%.

The yields on Spain’s benchmark 10-year bonds were at 6.78%. Italian 10-year yields were at 5.96%.

Gainers & Losers

Air Berlin Plc fell 1.1% to €1.75 after the German airline reported that its June capacity declined by a further 3.8% to 4.17 million seats. At the same time, capacity utilization decreased slightly to 79.03% from 80.03% a year ago.

Air France-KLM dropped 1.2% to $4.85 after the French carrier reported traffic, in terms of revenue per-kilometers, increased 4.6 % to 19.41 billion. Capacity, measured in available seat-kilometers, grew 1.9% to 23.06 billion.

Peugeot SA slumped 2.1% to $9.50 after the French carmaker said that worldwide sales of PSA Peugeot Citroën assembled vehicles and CKD units declined 13% annually to 1.62 million units in first-half 2012.

Roche Holding AG dropped 1.4% to $42.83 after the healthcare company received pre-market approval from the U.S. Food and Drug Administration for a new test to assess a patient''s viral load of cytomegalovirus.

SGS SA rose 0.4% after the multinational company announced the acquisition of Exprimo NV, a European life science consultancy company based in Mechelen, Belgium, for undisclosed terms.