European Markets Fall, UK Sets $3 Billion Royal Mail IPO

Nigel Thomas
10 Jul, 2013
New York City

European markets traded lower and investors looked to the U.S. Fed statement and Chinese trade data. French industrial output declined less than expected but Italian production rose. UK prepares to sell Royal Mail in $3 billion IPO.

[R]4:00 PM Frankfurt – European markets traded lower and investors looked to the U.S. Fed statement and Chinese trade data. French industrial output declined less than expected but Italian production rose. UK prepares to sell Royal Mail in $3 billion IPO.[/R]

European markets traded lower and France reported less than expected slowdown in industrial production and Italian production rose in May.

In London trading, FTSE 100 index declined 0.1% and in Frankfurt the DAX index fell 0.1%. Other markets in the region edged lower as well. The euro held its ground around $1.2812.

Italian industrial production increased 0.1% in May after dropping 0.3% in April. Production from a year ago declined 4.2% in May on 12% fall in mining activities and 15% decline in oil refining activities.

Yesterday, the rating agency Standard & Poor’s lowered Italy’s long term debt rating to BBB, two levels above junk and the agency cited falling economic conditions and struggling financial conditions.

In France, industrial production decreased 0.4% and rising 2.2% in April, national statistics agency Insee said in Paris today.

Separately, Bank of France said earlier in the week that gross domestic product increased 0.2% in the second quarter to June.

In addition the central bank said factory executive confidence increased to the highest level in two years in June.

Stocks in Review

Glencore Xstrata Plc fell 1.9% to 259.10 pence after the Switzerland based diversified natural resource is likely to sell its Dakota Growers Pasta Co for about $300 million to $400 million.

Halfords Group Plc surged 12.4% to 357.30 pence after the UK based automotive retailer said group revenue in the first quarter climbed 8.8% and like-for-like revenue jumped 7.5%. Online retail sales surged 15.5% and auto centers total sales soared 7.8%.

ICAP Plc declined 4.2% to 383.30 pence after the broker stated in interim report that group revenue for the quarter was 2% above from a year ago and expects will be remain unchanged for the year.

For the quarter, average daily volumes on EBS rose 1% to $128 billion from same period of last year.

Royal Mail Holdings Plc, the 360-year old postal services said in the press release that the government intends to dispose of a majority stake and intend sell 10% of all the shares free to employees at the time of initial public offering.

The initial public offering is likely to value the business between £2 billion and £3 billion.