European Markets Steady, Earnings in Focus

Barry Randall
23 Jan, 2013
New York City

European markets closed mixed after the latest batch of earnings from Unilever and Novartis. Resource stocks were higher after BHP Billiton reported higher production in the latest quarter. Banks were under pressure on profit taking after 10% surge in the year.

[R]4:30 PM – European markets closed mixed after the latest batch of earnings from Unilever and Novartis. Resource stocks were higher after BHP Billiton reported higher production in the latest quarter. Banks were under pressure on profit taking after 10% surge in the year.[/R]

Markets in Europe closed mixed after the IMF lowered global economic growth and said weakness in the euro zone weighed on the outlook.

In London, FTSE 100 index increased 0.3% or 18.5 to 6,198 and in Frankfurt, the DAX index increased 11.3 or 0.1% to 7,708. In Paris, CAC 40 index declined 0.4% to 14.8 to 3,726.

Banks and insurance companies were among the leading decliners in the region ahead of earnings this week and after surging more than 10% in the year so far.

Bank of Spain estimated recession deepened in the final quarter of 2012. Gross domestic product declined 0.6% from the previous quarter. For the year, GDP declined 1.3% and domestic declined 3.9% in the year after falling 1.9% in 2011.

Spain’s statistics agency in scheduled to release unemployment report tomorrow.

UK jobless claims declined in December according to the latest data from the Office for National Statistics. The claims declined unexpectedly by 12,000 from November to 1.56 million, the lowest since June 2011.

Stocks in Review

BHP Billiton gained 1.5% to 2,111.34 pence after the mining company reaffirmed its iron ore production growth in 2013 to 3%. Petroleum and iron ore production increased more than expected in the final quarter to December.

Unilever increased 3.1% after the consumer products maker said fourth quarter sales increased 7.8% on volume growth of 4.8% and price increase of 2.9%.

For the year 2012, sales increased 10.5% to 51.3 billion euros and foreign exchange gains contributed 2.2 percentage point increase and net impact from acquisition was 1.1%. Core earnings per share increased 11% to 1.57 euros and in the year free cash flow was 4.3 billion euros.

Novartis gained 4% after it released new sales outlook. Sales in the fourth quarter were flat at $14.8 billion and full year sales decreased 3% to $56.7 billion. Core earnings per share in the quarter increased 3% to $1.27 and full-year earnings fell 6% to $5.25.

The pharmaceutical maker reported dividend of Sfr2.30 a share, an increase for the sixteenth quarter in a row.

Market volatility dragged banks and financial institutions lower. Societe Generale declined 3.5% and Banco Popolare dropped 4.1%. Aegon decreased 2%.

Logitech International SA gained 6.5% to Sfr7.18 after the maker of personal computer accessories said it will book $211 million writedown linked to videoconferencing business in the third quarter.

SAP AG increased 2.4% to 59.10 euros said full-year net income is expected to increase 12%.

TUI Travel declined 5% to 278 pence after shareholders rejected the plan to merge the company with TUI Travel.

Aixtron SE soared 8.5% after its competitor Cree Inc estimated higher than expected sales in the quarter.