European Auto Sales Up, Inflation Worries

123jump.com Staff
20 May, 2008
New York City

European markets closed lower across the region led by a sharp decline in the UK and Swedish indexes. Crude oil prices reached another record above $129 a barrel, sparking fears of sustained inflation in the region. DAX 30 index in Germany and CAC 40 index in France dropped 1.5% and 1.7% respectively. German confidence fell on worries related to strong euro and rising inflation dominated the news. Auto sales in European markets rose nearly 10% in April.

[R]2:00PM New York, 8:00PM Frankfurt – Rising inflation and worries of more increase in inflation gripped investors in the region. Stocks fall as crude oil reached to a new record above $129 a barrel.[/R]

European Market Update

Inflation worries haunted investors as crude oil rose above $129 a barrel and continued uncertainty related to the U.S. credit markets. In France, the CAC 40 declined 1.7% to 5.054.88 while and Germany DAX 30 declined 1.5% or 107.44 to 7.118.50.

European market movers

Of the DAX 30 members, all stocks declined led by 7% fall in Infineon Technology to €6.65. Deutsche Boerse declined 4% or €4.15 to €100.40 euros, Deutsche Lufthansa AG lost 3.6% or €0.64 to €16.55. Thyssenkrupp AG fell 3.5% or €1.61 to €44.90 and Man AG was lower at 3.2% or €3.22 to €101.03.

Adidas AG fell 1.3% to €2.70. The company reported that its first quarter revenue climbed 3% to €2.621 billion from €2.538 billion in 2007.

The group said net income increased 32% to €169 million from €128 million last year driven by strong operating margin improvement and lower net financial expenses. Basic earnings per share rose 33% from a year earlier to €0.84 in 2008 up from €0.63 in 2007

Of the CAC 40 shares, Gaz De France led the gainers with a rise of 1.1% to €43.32. EDF gained 0.6% to €69.95 and Unibail Rodamco was higher at 1.4% to €169.

STMicroelectronics declined 4.9% to €8.17 euros, Air France lost 4.9% to €19.33 euros, EADS fell 4.3% or €4.85 euros, Alcatel declined 3.9% or €16.18 euros and ArcelorMittal declined 3.7% to €63.55.

Europe''s Car registration up 9.6% in April

European Automobile Manufactures’ Association reported new car registration in April rose 9.6% in Europe on more selling days in the month and despite the on-going credit market crisis and a steep rise in fuel prices.

The association said the period had two more selling days compared to March as Easter fell in the previous month.

German automakers Volkswagen AG, BMW AG and Daimler AG recorded the strongest gains in May as new passenger-car registrations came in at 1.42 million vehicles in the region.

Volkswagen, Europe''s biggest automaker by sales, saw European new-car registrations increasing 11.4% on the year in April to 293,567 vehicles, largely driven by rising demand at its VW, Seat and Skoda brands.

BMW and Daimler posted rises of 25% and 18% respectively as estimated by the companies a month ago.

BMW benefited from strong demand for the two-door version of its compact 1- series as well as the Mini brand. Demand for the revamped version of Daimler''s Smart model jumped 45% on the year in April.

German Investors Confidence Decline

ZEW Center for European Economic Research reported investor''s confidence in Germany dropped for the second month in a row in May on rising inflation and higher food and energy prices. The centre said the economic growth will be affected by the fallout from the U.S. housing market correction. Investor and analyst expectations declined to minus 41.4 from minus 40.7 in April.