European Indexes Pare Gains, Spanish Jobless Rate at 24.6%

Arthi Gupta
27 Jul, 2012
New York City

The European indexes pared gains on worries that Greece is struggling to meet its deficit target. Euro-zone leading index declined in June. Spanish jobless rate rose in the second quarter. Total and Lafarge quarterly earnings slumped.

[R]1:30 PM Frankfurt – The European indexes pared gains on worries that Greece is struggling to meet its deficit target. Euro-zone leading index declined in June. Spanish jobless rate rose in the second quarter. Total and Lafarge quarterly earnings slumped.[/R]

European indexes pared yesterday’s gain after Spanish jobless rose to a record level again and Greece is unable to meet the deficit target set forth for receiving aid. Market sentiment was also weak after few companies missed earnings expectations.

French consumer sentiment dropped and Italian business confidence fell more than expected in July.

In Paris trading, the CAC-40 Index fell 8.07 or 0.3% to 3,199.06 and in Frankfurt the DAX Index edged lower 48.31 or 0.7% to 6,538.30.

For the week, the CAC-40 Index rose 0.2% and DAX Index soared 6.3%.

The yields on Spain’s benchmark 10-year bonds fell 15 basis points lower at 6.75%. Italian 10-year yields declined 10 basis points lower at 5.95 %.

Euro-zone Leading Index Declines

A leading indicator of the euro-zone economy fell in June, data from a survey by the Conference Board showed today.

The leading index dropped 0.3% sequentially to 104.8 in June, following a similar fall in May. The latest decrease was the third in a row.

The coincident index, which measures the current economic conditions, remained unchanged at 101.9 in June.

French Sentiment Drops

French consumer sentiment decelerated to 87 in July from 89 in June, survey data from the statistics office Insee showed today.

Spanish Jobless Rate Rises

Unemployment rate in Spain increased to 24.63% in the second quarter from 24.44% in the first quarter, the latest data from the statistical office Ine showed.

The number of unemployed persons rose by 53,500 over the quarter to 5.69 million. In total 859,000 more people were unemployed compared to last year.

Italian Business Confidence Wanes

Italy''s business confidence among manufacturers dropped more than expected to 87.1 in July from 88.7 a month ago, the statistics office Istat said.

The composite index, obtained by summarizing the confidence climates of manufacturing, construction, market services and retail trade, climbed to 81.8 in July from 75.8 in June.

HSBC to Sell Stake in Global Payments Asia-Pacific

HSBC Holdings plc''s wholly owned unit, the Hongkong & Shanghai Banking Corp., will sell its 44% stake in Global Payments Asia-Pacific Ltd. to Global Payments for $242 million cash. The sale is expected to be completed within the second half of the year.

Gainers & Losers

Barclays PLC soared 4.1% to 159.95 pence after the financial services provider said second quarter pre-tax profit climbed to £1.23 billion from £989 million last year. Total income for the quarter increased 5% to £3.03 billion from the comparable period a year ago.

Compagnie de Saint-Gobain SA plunged 10% to €24.72 after the construction materials supplier reported first-half sales advanced 3.4% to €21,590 million. Net income for the period fell 34.1% to €506 million from €768 million in the same period last year.

Groupe Danone SA rose 1% to €48.02 after the food maker stated first-half consolidated sales increased 7.7% to €10.48 billion from last year. Net income gained to €881 million from €865 million last year.

European Aeronautic Defence and Space Co. surged 6.5% to €30.03 after the aerospace and defense contractor said first-half revenues increased 14% to €24.9 billion driven by growth across all divisions. Net Income rose significantly to €594 million or earnings per share of 73 cents.

Ferrovial S.A. fell 1.9% to €8.42 after the infrastructure and services company firm reported first-half revenues grew 3.3% to €3.66 billion. Net profit for the period fell 15.2% to €265 million.

Lafarge SA dipped 0.4% to €36.01 after the cement maker reported second quarter sales rose 5% to €4.261 billion. Net income group share plummeted 80% to €57 million from €289 million.

Linde AG climbed 0.5% to €118.55 after the German industrial gases producer reported first-half group revenue grew 5.9% to €7.17 billion. Net profit attributable to shareholders increased to €591 million or €3.45 per share from €566 million or €3.32 per share in the previous year.

Michelin SCA gained 5.6% to €54.07 after the French tire maker said first half net sales improved to €10.706 billion from €10.105 billion in the prior year. Net income increased 37% to €915 million from €667 million.

Pearson PLC slumped 4.6% to 1,235 pence after the media and education company said first-half sales climbed 7% to £2.583 billion from £2.416 billion. Profit attributable to equity holders of the company fell to £43 million from £60 million. Earnings per share were 5.4 pence compared to 7.5 pence last year.

Renault SA advanced 3.9% to €35.10 after the automobile manufacturer said first-half group revenues dipped 0.8% to €20.935 billion from €21.1 billion a year earlier. Net income slumped to €786 million from €1.25 billion in the prior-year period.

The group sold 1.33 million units, down 3.3% on first-half 2011. For the full year, Renault expects global automotive demand to grow by 5%.

Total SA rose 2.1% to €36.88 after the oil and gas explorer reported second quarter sales of €49.14 billion, from €45.01 billion in the prior-year quarter, up 9%. Net income group share fell 42% to €1.59 billion from €2.73 billion a year ago.