GDP Up 0.8%, German Auto Sales Fall

123jump.com Staff
03 Jun, 2008
New York City

European retailers lifted the market indices in the region higher while declining oil price added the positive market sentiment. The European Statistics office Eurostat reported economic growth in the region rose 0.8% in the first quarter of 2008. Investment and construction spending in Germany helped the region. German auto sales, exports and production fell in May but for the first five months in the year registered gains.

[R]3:00PM New York, 9:00PM Frankfurt – European stocks rise on better than expected economic growth and increased consumer spending in first Quarter 2008./R]

Europe market update

European retailers lifted the continent''s indices higher while declining oil price added the positive market sentiment. The European Union''s Statistics office reported economic growth in the region rose 0.8% in the first quarter of 2008 as investment and construction spending in Germany helped the region to offset crude prices pressures.

German auto sales declined 6% in May, hurt by rising fuel prices and as the government debates to levy additional taxes on luxury cars or all cars.

Economy grows at 0.8%

Euro zone countries in the 15 and 27 nations region grew by 0.8% in the first quarter of 2008, compared with the previous quarter, according to first estimates released by statistical agency Eurostat. In the fourth quarter of 2007, growth rates were 0.3% in the euro area and 0.5% in the EU27.

Investments grew by 1.6% in the euro area of 15 nations and 1% in the region of 27 nations. Exports rose by 1.9% in the euro area and by 1.7% in the EU27 nations. Imports increased by 1.8% in the euro area by 1.1% in the wider region of 27 nations.

European Producer Price index rise

April industrial producer price index rose by 0.8% in the euro area of EU15 and by 0.9% in the area of 27 nations. In March prices increased by 0.7% in both zones. This shows the increased cost of production being fuelled by rising oil and commodities prices.

Among member states on a monthly basis the highest index increases were registered in Denmark of 3.3%, Ireland and Netherlands of 1.5%. The industrial index was stable in Czech Republic. The only decrease was recorded in Luxembourg of 0.30%.

On an annual basis among the member states In April 2008, compared with April 2007 prices in total industry excluding the energy sector increased by 3.7% in the euro area and by 4% in the EU27. Prices in the energy sector rose by 14.3% and 18.5% respectively.

Among member states with available data the highest increases were recorded in Lithuania of 16.5%, Denmark of 15.7% and Romania of 14.4%. The lowest was registered in Czech Republic of 4.7% and in Luxembourg and Finland of 5.1%.

Germany auto sales fell

German auto sales declined 6% in May exports fell 4% and production dropped 5%.

Car sales plummeted to 275,300, hurt by a decline in vehicle sales at Volkswagen, BMW and Daimler. Production declined 5% to 452,800 cars as a result of fewer working hours. Overseas exports fell 4% to 343,800 vehicles during the months.

In the first five months of the year, sales rose 4% to 1.33 million vehicles as compared to the same period a year ago. Exports rose 3% to 915,000 and production gained 3% to 2.5 million.

According to the information published on the VDA website, in April sales of passenger cars in Europe came to over 1.4 million vehicles, exceeding the previous year’s level by 10%. At the end of April, sales of passenger cars in Europe totaled 5.6 million vehicles, 1% higher than the same period last year.

Sales in Western Europe hovered around last year’s levels on the volume markets of Italy, Spain and the United Kingdom, owing to weak demand, while sales in the new EU countries climbed by 13%.

European markets review

In London FTSE 100 Index closed higher 50.10 or 0.83% to 6,057.70, in Paris CAC 40 Index increased 48.50 or 0.98% to close at 4,983.71 and in Frankfurt DAX index higher 10.36 or 0.15% to close at 7,019.13. In Zurich trading SMI increased 34.74 or 0.46% to close at 7,590.44.

European Gainers and losers

Cap Gemini led the gainers in the CAC 40 index stocks with a rise of 3.53% to 44.50 euros followed by gains in EADS of 3.29% to 15.03 euros, in Alcatel-Lucent of 3.27% to 4.90 euros, in EDF of 3.20% to 70.57 euros and in Carrefour of 3.13% to 45.38 euros.

AXA led the decliners in the CAC 40 index with a loss of 1.18% to 21.75 euros followed by losses in BNP Paribas of 0.98% to 64.37 euros, in Danone of 0.88% to 54.96 euros, in Air France-KLM of 0.54% to 16.50 euros and in Societe Generale of 0.40% to 64.73 euros.

Among the DAX 30 index shares, Infineon Technologies led the gainers with a rise of 7.41% to 6.09 euros followed by gains in Henkel KGaA of 2.62% to 30.94 euros, in Merck KGaA of 1.83% to 89.40 euros, in ThyssenKrupp AG of 1.78% to 44.15 euros and in RWE AG of 1.69% to 84.40 euros.

Deutsche Borse led the decliners in the DAX 30 index with a fall of 3.79% to 87.89 euros followed by losses in Continental AG of 2.51% to 75.79 euros, in Hypo Real Estate Holdings of 2.28% to 20.58 euros, in TUI AG of 1.43% to 16.55 euros and in MAN AG of 1.42% to 98.15 euros.

World markets review

In Tokyo Nikkei 225 Index closed lower 230.97 or 1.60% to 14,209.17, in Hong Kong Hang Seng index decreased 455.60 or 1.83% closed to 24,375.76. In Australia ASX 200 index lower 88.10 or 1.56% to close 5,574.20. In Malaysia KL Composite index decreased 4.92 or 0.39% closed to 1,257.57.

In South Korea Kospi Index decreased 28.14 or 1.52% to close at 1,819.39, in Thailand SET index closed lower 3.36 or 0.41% to 806.86 and Indonesia JSE Index edged decreased 23.95 or 0.99% to 2,403.81. Sensex index in India decreased 100.62 or 0.63% to 15,962.56.