European Nations Report Weakening Economic Data

Arthi Gupta
10 Aug, 2012
New York City

The European indexes declined after China reported a slowdown in international trade. German inflation and the UK output price inflation eased in July. French output was flat in June. ThyssenKrupp quarterly net rose 16%.

[R]1:45 PM Frankfurt – The European indexes declined after China reported a slowdown in international trade. German inflation and the UK output price inflation eased in July. French output was flat in June. ThyssenKrupp quarterly net rose 16%.[/R]

European indexes turned down after China reported exports barely budged in July and the growth in imports declined as well. The euro weakened.

China’s Exports in the month rose 1% from a year ago month after rising 11.3% in June. Imports increased 4.7% after advancing at a faster rate of 6.3% in the previous month.

China''s trade surplus narrowed to $25.1 billion in July from $31.7 billion in June, the latest data from the General Administration of Customs showed today.

The latest data from China a day after the fastest growing the nation reported a day ago slowing retail sales, industrial output and inflation.

In economic news, German inflation and the UK output price inflation eased in July. French output remained flat and the Dutch surplus gained in June.

In earnings news, Hannover Re second quarter group net income fell 13.4%. ThyssenKrupp reported third quarter revenue fell 7% and net income increased 16%.

In Paris trading, the CAC-40 Index declined 30.48 or 0.9% to 3,426.35 and in Frankfurt the DAX Index edged lower 38.36 or 0.6% to 6,926.73.

For the week, the CAC-40 Index rose 1.5% and the DAX Index soared 12.7%.

The yields on Spain’s benchmark 10-year bonds rose four basis points to 6.84%. Italian 10-year yields climbed two basis points to 5.84%.

German Inflation Eases

Germany''s harmonized index of consumer prices, measured under the EU methodology increased 1.9% annually in July, lower than the 2% gain estimated earlier. In June, the inflation rate was 2%.

From a month ago, the HICP rose 0.4% in July, unrevised from the flash estimates. In June, prices dropped 0.2% sequentially.

French Production Flat

France''s industrial production remained flat on a monthly basis in June, after falling a revised 2.1 percent in May, data released by statistical office Insee showed.

Production in mining and quarrying climbed 0.7% in June compared to the previous month, data showed.

Dutch Surplus Rises

The Netherlands'' trade surplus increased €0.9 billion from last year to €3.7 billion in June, data released by the Central Bureau of Statistics showed today.

Exports increased 8% on an annual basis to €35.9 billion and imports rose 6% to €32.1 billion in June.

UK Output Price Inflation Slows

The UK''s output price inflation eased to 1.7% in July from a revised 2% in June, the latest data from the Office for National Statistics showed today. The last time the annual rate was lower was in October 2009, when the index rose 1.5%, according to the statistics office.

On a monthly basis, the output price index remained flat.

Separately, the statistics office reported that the total volume of construction output in the second quarter fell 3.9% compared with the first quarter of 2012.

Gainers & Losers

Barclays Plc rose 2.3% to 183.05 pence after the UK based bank appointed David Walker as a non-executive Director of the bank and said he would succeed Marcus Agius as Chairman from November 1.

Bechtle AG fell 2% to €30.78 after the German IT service provider reported second quarter revenues grew 8.4% to €495.32 million from €457.03 million a year ago. Net earnings fell 25.2% to €10.83 million or 51 cents per share from €14.48 million or 69 cents per share last year.

Fraport AG dipped 0.9% to €44.58 after the airport operator handled almost 5.8 million passengers in July, a 3.7% increase from a year ago.

Hannover Rueckversicherung AG slumped 4.4% to €47.33 after the reinsurer said second quarter group net income fell 13.4% to €144 million or €1.19 per share compared to €166.2 million or €1.38 per share a year ago.

Prudential PLC declined 0.8% to 797.50 pence after the insurer said first-half profit attributable to equity holders of the company rose to £952 million or 37.5 pence per share compared with £829 million or 32.6 pence per share last year.

Rheinmetall AG dropped 1% to €40.10 after the automotive components and defense equipment maker said first-half consolidated sales rose 9% to €2.25 billion from a year earlier. Earnings per share increased to €2.20 from €1.91 in the previous year period.

RWE AG dipped 0.1% to €33.11 after the German utility presented plans to slash up to 2,400 additional jobs, the news wire Reuters noted citing sources.

ThyssenKrupp AG soared 5.1% to €16.45 after the steelmaker reported third quarter revenue fell 7% to €10.71 billion. Net income increased 16% to €238 million from €205 million in the same period a year earlier.