European Markets Push Higher on German Data, Nokia Drops Dividend

Barry Randall
24 Jan, 2013
New York City

European markets advanced to multi-year highs after German business confidence rebounded and a private survey showed that the decline in activities in the euro zone decelerated. Nokia suspended its dividend after 20 years. Logitech plunged 10% after declaring a loss.

[R]4:30 PM Frankfurt – European markets advanced to multi-year highs after German business confidence rebounded and a private survey showed that the decline in activities in the euro zone decelerated. Nokia suspended its dividend after 20 years. Logitech plunged 10% after declaring a loss.[/R]

European markets extended gains on the hopes that corporate earnings will stay above expectations and latest economic data from Germany.

International markets sentiment also was positive after jobless claims declined in the U.S. and a private manufacturing survey in China showed strength in manufacturing.

In London, FTSE 100 index surged 1.1% or 65.5 to 6,263 and in Frankfurt DAX index gained 34.6 or 0.4% to 7,742.

Market indexes in Paris gained 0.6% and advanced in 14 of the 17 larger markets in the euro zone.

Markets declined earlier after Nokia swung to profit but suspended the dividend after 20 years and private sector activities in the euro zone contracted at the slowest pace in 10-months.

The survey published by Markit indicated that flash composite purchasing managers’ index increased to 48.2 in January from 47.2 in December. Index below 50 indicates a decline, and the index has recovered to the slowest pace of decline in a year.

The euro zone economy contracted in the second and third quarter of 2012 and the expectations are that the economy will contract more in the fourth quarter.

Also, business activities in Germany rose at the quickest pace in a year in January.

Stocks in Review

Croda International Plc gained 3% to 2,437 pence after JPMorgan Chase reiterated its outlook on the stock rating.

EasyJet gained 5% to 898 pence after the discount airline reported revenues jumped 9% to 833 million pounds the quarter to December. The company also guided a pre-tax loss between 50 million and 75 million pounds in the first half of 2013.

ICAP Plc decreased 1% to 324 pence after the broker dealer services provider said that the UK regulator has initiated Libor investigation at one of its unit.

Logitech plummeted 10% to Sfr6.51 after the personal computer accessories maker reported a loss and decided to sell its remote control and video securities business for sale.

Monte Paschi dropped 8% to 23.3 euros after the central bank in Italy said it will review the recently uncovered documents related to a derivative transaction and may force the oldest bank in the world to restate earnings.

Nokia declined 1.7% after it swung to quarterly profit but suspended its dividend for the first time in 20 years to shore up its finances as the company struggles with sales and falling margins.

Opap SA declined 11% to 6.25 euros after the European Court of Justice ruled that the company’s gambling monopoly in Greece was illegal. Bwin and Ladbrokers rose 12% and 4%.

Polyus Gold International Ltd soared 10% to 218 pence after Onexim Holdings Ltd is said to have sold its stake in the company to a group of investors. Onexim is controlled by Russian billionaire Mikhail Prokhorov.

Vodafone Group Plc increased 3% to 168 pence on a speculation that the U.S. based Verizon Communications Inc may buy the company to gain full control of Verizon Wireless. Vodafone controls 45% of the joint venture.