German Confidence Index Up

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

Rising crude prices dominated trading sentiment in the European markets. However, German business confidence index rose in May and outlook for the six months appear positive according to the businesses surveyed. German businesses and economy is able to withstand strong euro as exports remain strong to the Middle East and Asia. In Germany, the DAX 30 declined 1.1% or 74.4 and the French CAC 40 lost 0.7% or 22.60.

[R]3:00PM New York, 9:00PM Frankfurt - European shares fell as oil surged above $131 a barrel. German confidence rose in May.[/R]

Europe Update

European shares fell on Wednesday as stocks of energy companies continue rising on spiraling crude prices. In Germany, the DAX 30 declined 1.1% or 74.4 and the French CAC 40 lost 0.7% or 22.60.

Rising business confidence in Germany has sent the euro one-month high against the UK pound and gained a cent against the dollar. A latest survey of German businesses showed a rise in confidence. A week ago German economy posted 1.5% rise in the first quarter of 2008.

The UK interest rates remained unchanged after eight of the nine monetary policy committee members voted to hold the benchmark interests rate at 5%. The majority of policy makers argued that a reduction would fuel inflation.

Europe Market Movers

Of the DAX 30 shares in Frankfurt trading, Merck KgA led by 2.2% rise or 1.92 euros, RWE AG gained 1% or 0.91 euros, BASF increased 1% or 0.91 euros, E.ON AG climbed 0.9% or 1.23 euros and Linde AG jumped 0.5% or 0.43 euros.

Infineon led the decliners in the index with a loss of 5.4% as the future of its CEO hangs in a balance followed by losses at Bayer of 4.2% and 3.3% at Continental AG. Daimler lost 2.7% after it posted 18% rise in auto sales in May. Hypo Real Estate fell 2.7% to 0.58 euros.

Among the CAC 40 shares in Paris trading, Peugeot led the decliners with a loss of 4.5% to 41.82 euros followed by losses at Michelin of 3.4% to 59.05 euros, at Societe Generale of 3.1% to 66.01 euros, at Renault of 3% to 64.91 euros and at Air France of 2.7% to 18.80 euros.

Vallourec led the gainers with a rise of 1.9% to 167.41 euros followed by increases in Unibail Rodamco of 1.4% to 171.40 euros, in Essilor International of 1.2% to 40.27 euros, in Suez of 1.1% to 40.27 euros and in Total of 1.1% to 57.585 euros.

German business confidence rise

The Munich based Ifo Institute reported that index of business confidence in Germany rose in May with more companies optimistic on the current business conditions and in outlook during the next six months. The institution in its latest survey said business climate index in the Europe's largest economy climbed to 103.5 in May.

Eurozone inflation was 3.3% last months and analysts forecast the rising fuel price could push inflation higher in the next few months.