Earnings and German Orders Data Lift European Markets

Nigel Thomas
07 May, 2013
New York City

European markets traded higher after German factory orders increased more than expected and earnings at Societe Generale, Commerzbank, HSBC and Allianz were ahead of expectations. German factory orders rose 2.2% in March. Portugal successfully sold long term bonds for the first-time in two years.

[R]4:30 PM Frankfurt – European markets traded higher after German factory orders increased more than expected and earnings at Societe Generale, Commerzbank, HSBC and Allianz were ahead of expectations. German factory orders increased 2.2% in March. Portugal successfully sold long term bonds for the first time in two years.[/R]

Markets in Europe advanced across the currency zone.

FTSE 100 index in London gained 0.4% and the DAX 30 index soared 0.9% and the CAC 40 index in Paris advanced 0.7%.

Market sentiment was also bolstered after the second largest French bank Societe Generale reported lower than expected decline in net income and Germany based Allianz SE reported 24% increase in quarterly net.

Commerzbank swung to quarterly profit and HSBC Holdings quarterly net more than doubled to $6.35 billion.

German factory orders adjusted seasonal factors and inflation increased 2.2% in March compared to similar increase in February, the Economy Ministry in Berlin said today.

Export orders increased 2.7% and orders from the euro zone advanced 4.2%, according to the report. Domestic sales increased 1.8% and consumer goods orders decreased 0.7%.

Swiss unemployment held unchanged at a 2-year record at 3.1% in April.

Portugal placed long term bonds for the first time since the €78 billion bailout two years ago today. Finance Minister Victor Gaspar said today demand for 10-year bond at 5.5% yield is expected to be around €9 billion.

Stocks in Review

Alstom SA dropped 12% after the third largest power equipment maker in the world lowered its 2013 outlook and missed its full-year earnings estimate.

Commerzbank AG gained 1.5% to €10.97 after the Germany based lender reported net interest income in the first quarter ending in March dropped 19.5% to €1.36 billion. Consolidated loss in the quarter swung to €94 million compared to profit of €355 million a year ago.

HSBC Holdings Plc jumped 2.9% to 734.50 pence after the UK based bank reported revenue in the first quarter ending in March jumped 14% to $18.42 billion. Profit for the quarter more than doubled to $6.35 billion compared to $2.58 billion and diluted earnings per share soared 33 cents from 13 cents a year earlier.

Hochtief AG soared 7.3% to €57.30 after the Germany based construction group agreed to sell its airport segment AirPort GmbH, Essen to Public Sector Pension Investment Board of Canada. The transaction proceeds are nearly €1.1 billion and closing is expected in the second half of this year.

Hochtief, lifted business outlook and expects consolidated net profit is estimated between €210 million and €250 million. New orders in the quarter ending March to €5.55 billion compared to €7.69 billion a year ago period. Operating earnings EBITA to €189.1 million

Consolidated net in the quarter swung to €43.5 million profit compared with a consolidated net loss of €34.8 million in the prior-year period.

Lafarge SA increased 4% after the largest cement maker reiterated its full-year earnings outlook despite the first quarter sales were lower than expected on Algerian and Egyptian production and cold weather in Northern Europe.

Prudential Plc declined 1.2% to 1,140 pence despite the largest UK based insurer reported first quarter revenues of more than expected 1.04 billion pounds.

Societe Generale soared 6.5% after first-quarter profit declined 50% on charges linked to its debt but were still ahead of expectations at €364 million.