European Markets Extend Gains, Weak German Business Confidence

Jeffrey Gogo
24 Apr, 2013
New York City

Market indexes across the European Union gained despite for the second day weak economic data. German business confidence declined and UK retail sales dropped. In corporate profits, Daimler AG said operating profit shrank 56% and Credit Suisse reported a surge in net income.

[R]3:10 PM Frankfurt – Market indexes across the European Union gained despite for the second day weak economic data. German business confidence declined and UK retail sales dropped. In corporate profits, Daimler AG said operating profit shrank 56% and Credit Suisse reported a surge in net income.[/R]

Across the European continent advanced for the third day in row following the gains in Asia. Resource stocks surged after metal prices picked up but German business confidence declined in April.

In London trading, the FTSE 100 rose 0.24% or 14.93 to 6,420.96 on a strength in resource sector stocks.

The DAX in Frankfurt gained 0.50% to 7,693.47. The CAC 40 in Paris lifted higher 0.76% or 28.94 to 3,811.99.

In London, Xstrata plc, Rio Tinto and BHP Billiton rose between 1.6% and 3.5%. Gold gained 1% and silver recovered 1.75%.

German Confidence Index Weakens

German business confidence fell to 104.4 in April from 106.7 a month earlier, the second straight decline, according to the Munich research institution, Ifo.

The index for businesses current conditions dropped to 107.2 from 109.9 in March. Yesterday, the Markit''s purchasing managers index (PMI) showed German factory output at its weakest in nine months.

The PMI surveys also showed weakening economic activity from China to the euro zone to the US.

UK Retail Sales Drop

UK retail sales index surprisingly fell to -1 in April from zero the previous month, the Confederation of British Industry said Wednesday. For May, estimated sales index dropped to -6.

Poor weather affected consumer spending in recent months, the Office for National Statistics reported last week.

Separately, home loans lending fell by £328 million in March, as approved mortgages declined 1.2% to 31,227 over the year, the British Bankers Association said today.

Daimler Earnings Fall, Credit Suisse Net Jumps

Daimler AG, maker of the luxury automobiles, fell 0.81% after first quarter earnings before interest and tax dropped sharply, underperformed expectations.

Operating earnings sank 56% to €917 million from €2.1 billion in the comparative period last year. Sales declined 3% to €26.1 billion. Daimler lowered its profit forecast for 2013 to below the prior year''s €8.1 billion.

Barclays Bank shares fell as much as 1.24% to 294.60 pence in London after first quarter net plunged 25% to £1.8 billion. Profits suffered due to a restructuring charge of £514 million. Barclays expects an additional £500 million charge in the current year.

Credit Suisse Group AG, the second largest Swiss bank, rose 0.79% after reporting net income in the quarter to March jumped to Sfr1.3 billion from Sfr44 million a year ago.