German and French Indexes Lead 2015 Gains in Europe

Lucy Stoeva
30 Dec, 2015
New York City

European markets declined on Wednesday, led by mining and energy companies. Apple Italia agreed to pay

[R]4:00 PM Frankfurt – European markets declined on Wednesday, led by mining and energy companies. Apple Italia agreed to pay €318 million to settle a tax dispute. Alstom lifted its stake by 8% in Russian Transmashholding. Willis Group acquired the remaining 70% stake in Gras Savoye.[/R]

European markets declined on Wednesday, led by mining and energy companies, who continuously suffer the consequences of falling commodity and oil prices.

After a short rebound on Tuesday, Brent crude oil fell back to near 11-year lows following comments from Ali al-Naimi, Saudi Arabia’s oil minister suggesting that the world’s biggest oil producer had no intentions to cut down production.

With the oil supply and inventories running ahead of demand and new supply coming from Iran in the next few weeks and the slowing demand from China, the outlook for energy companies in 2016 remains gloomy.

In addition, IMF chief Christine Lagarde warned of disappointing global growth in 2016 in an article for German newspaper Handelsblatt.

The prospect of rising interest rates in the United States and an economic slowdown in China were contributing to uncertainty and a higher risk of economic vulnerability worldwide, Lagarde said.

Lagarde pointed out the slowdown in global trade, the decline in raw material prices, the weakness in the financial sectors, the low productivity, and the ageing populations in many countries as factors for “disappointing and uneven growth in 2016.”

In London trading, FTSE 100 index fell 20.22 or 0.3% to 6,274.98 and in Frankfurt the DAX index decreased 117.13 or 1.1% to 10,743.01.

In Paris, CAC 40 index slipped 17.05 or 0.4% to 4,684.77.

For the month, FTSE 100 index slid 1.3%, the DAX index plummeted 5.6%, and the CAC 40 index declined 5.5%.

For the quarter, FTSE 100 index jumped 3.5%, the DAX index soared 11.2%, and the CAC 40 index gained 5.2%.

For the year, FTSE 100 index declined 4.2%, the DAX index jumped 9.6%, and the CAC 40 index surged 10.4%.

Apple Italia, the Italian subsidiary of Apple, agreed to pay €318 million, or $348 million, after an investigation for tax fraud.

According to the Italian tax officials, the company failed to pay €880 million in taxes between 2008 and 2013.

Alstom SA gained 0.6% to €28.13 after the French transportation company bought additional 8% in Russian Transmashholding from Russian Railways for €54 million.

Following the transaction, Alstom now owns 33% in Transmasholding, one of the largest railway engineering companies, and has two seats on the board of directors.

Gras Savoye, the French insurance broker, said that Willis Group Holdings had completed the acquisition the remaining 70% stake in the company.

Minoan Group Plc soared 13.6% to 7.95 pence as its project for a major holiday development on the Greek island of Crete is near final approval.

The U.K. hotels and resorts operator said that the approval of its presidential decree, similar to an outline planning consent, is now reaching its final stages.

After the decree, Minoan''s joint venture partners will have to decide whether to pay £12.5 million to increase their stake by 25%.

The Greek government has relaxed planning procedures to speed up the investment process in the country.

Ocado Group Plc declined 4.7% to 310.70 pence as the British online grocery retailer faces growing competition from a rival service at Amazon.

Amazon plans to expand its grocery delivery services in U.K and add more products in 2016.