European Indexes Lower, Trade Surplus Rises

Arthi Gupta
16 Nov, 2012
New York City

The European indexes edged lower after euro zone trade surplus rose in September. European new car sales fell in October. Graphic Packaging agreed to acquire Contego for

[R]12:20 PM Frankfurt – The European indexes edged lower after euro zone trade surplus rose in September. European new car sales fell in October. Graphic Packaging agreed to acquire Contego for £71 million.[/R]

The European indexes declined after euro area current account surplus declined in September and new car sales fell in October.

Investors focus on the meeting between the U.S. President Barack Obama and lawmakers on the so called “fiscal cliff” that is set to kick in automatically the spending cuts and tax increases of $600 billion from January 1.

International Monetary Fund Managing Director Christine Lagarde is scheduled to meet euro zone leaders in Brussels on November 20. Greece and Spain would be in focus.

In Paris trading, the CAC-40 Index declined 24.02 or 0.7% to 3,358.45 and in Frankfurt the DAX Index edged lower 58.41 or 0.8% to 6,985.11.

For the week, the CAC-40 Index fell 1.9% and the DAX Index slumped 2.5%.

The yields on Spain’s benchmark fell four basis points to 5.86%. Italian 10-year yields fell two basis points to 4.87%.

Euro Zone Surplus Climbs

The euro zone trade surplus increased to €9.8 billion in September following a €5.2 billion surplus in August, Eurostat reported today.

Exports dropped 1.1% in September from a month ago reversing the 3.3% rise in August. Imports slipped 2.7% in September after increasing 2.3% in August.

Separately, the euro area current account surplus declined to €0.8 billion in September from €10.9 billion in August, the European Central Bank said.

Italian Trade Balance Swings to Surplus

Italy''s trade balance swung to a surplus of €408 million in September from a deficit of €483 million in August, data from statistics office Istat showed today.

Compared to the previous month, export decreased 2% reflecting sales drop for both European and non-European markets and imports fell 4.2% in September.

European New Car Sales Drop

New passenger car registrations in the EU 27 nations fell 4.8% annually to 959,412 cars in October, data released by the European Automobile Manufacturers'' Association showed today.

From January to October, new car registrations amounted to 10,327,276 units or 7.3% less in than in the first ten months of 2011.

Graphic Packaging to Acquire Contego

Graphic Packaging Holding Company agreed to acquire Contego Cartons, the UK based food and consumer product packaging company.

Under the terms of the transaction, Graphic Packaging will pay approximately £71 million in cash and assume approximately £10 million in other net liabilities in an all cash transaction.