European Indexes Retain Momentum; Safran Up

Mayank Mehta
21 Dec, 2009
New York City

European market indexes edged higher as the prospect of economic recovery looks brighter in the region. Estimates of economic growth were revised higher by the European Commission and a trade group in the UK. Safran SA gained on $5 billion orders from China.

[R]8:00 PM Frankfurt, 2:00 PM New York – European market indexes edged higher as the prospect of economic recovery looks brighter in the region. Estimates of economic growth were revised higher by the European Commission and a trade group in the UK. Safran SA gained on $5 billion orders from China.[/R]

The Confederation of British Industries revised its economic view for the UK economy to an expansion of 1.2% from the previous estimate of 0.9%. The industry estimated economic contraction of 4.5% in 2009. The benchmark interest rate is expected to increase to 2% by the end of the year from the current 0.5%.

The European Commission lifted its outlook for the European economic expansion to 0.7% in 2010 and 1.5% in the year after.

In London FTSE 100 Index closed higher 97.18 or 1.9% to 5,293.99, in Paris CAC 40 Index increased 77.62 or 2.1% to close at 3,872.06, in Frankfurt DAX index higher 99.32 or 1.7% to close at 5,930.53. In Zurich trading SMI increased 40.12 or 0.6% to close at 6,504.44.

Stock Movers

Allianz SE increased 2.7% to €86.28 after the company said it plans to sell its private equity unit in France, AGF Private Equity to investment management company IDI.

Infineon AG increased 3.9% to €3.72.

K+S AG increased 1.5% to €41.56 after Goldman Sachs recommended the agro-chemical makers including the company and Potash Corp of Saskatchewan Inc and Mosaic Co.

Natixis SA increased 3.6% to €3.385 after it confirmed that deputy chief executive Jean-Marc Moriani will resign from the bank. The lender also estimated a net profit in the fourth quarter.

A rally in commodities lifted the steelmakers. ThyssenKrupp edged up 2% to €25.91 and Salzgitter AG increased 1.6% to €68.45.

Safran SA increased 4.5% to €13.49 after it won $5 billion order to sell aircraft engines to build narrow body aircraft to a Chinese maker. The joint venture between the company and General Electric, CFM International is selected to power China’s first commercial aircraft C919. China expects to sell 2,000 aircrafts in the next 20 years.

Sky Deutschland AG soared 11% to €2.08 after News Corp increased its stake in the company to 45.4% on the purchase of 49 million shares.

Siemens AG increased 2.8% to €63.44 after chief executive Peter Loescher rejected a news report published in WirtschaftsWoche that the company is planning to cut 10,000 jobs.

Thomson SA soared 24% to €1.09 after company said suppliers and banks have approved its restructuring plan ahead of bond holders meeting tomorrow.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 4.21%, followed by losses in BMW AG of 0.33%.

Infineon Technologies AG led gainers in the DAX index with a rise of 3.34% followed by increase in Siemens AG of 2.59%, in Deutsche Telekom AG of 2.34%, in MetroAG of 2.23%, and in Bayer AG of 2.17%.

CAC-40 Index Movers

Alcatel Lucent led the decliners in the CAC-40 index of 0.88%, followed by losses in Suez Environnement SA of 0.43%, in Michelin SCA of 0.21%.

L''Oreal SA gainers in the CAC-40 index with a rise of 3.76% followed by gainers in ArcelorMittal of 3.51%, in Dexia SA of 3.14%, in TOTAL S.A. of 3.13%, and in LVMH Moet Hennessy Louis Vuitton SA of 2.98%.