European Stocks Decline

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

European stocks declined in the late afternoon trading. Italy reported a slight decline in current account deficit but the foreign reserves remain stable at the end of April. Retail sales in the month of May in the UK rise, surprising most observers. Rising non-food stores contributed to gains. Dollar trades lower and oil trades at elevated level. Vallourec falls 4% in Paris and E.On AG in Frankfurt gained 2%.

[R]12:00PM New York, 4:00PM Frankfurt – European stocks fall in mid-day trade, Households spent more in food and housing. Union workers stage a protest in Brussels. Current account deficit remains high in Italy and retail sales rise in the UK.[/R]

Europe market update

European stocks fell in the mid-day trading session. The mid-day key indices in Germany and France were lower.

The CAC 40 lost 0.06% in mid-day to 4,615.93. In Germany the DAX 30-index retreated 12.13 points or 0.18% to 6,716.78. Stocks in Switzerland slipped as the Swiss Market index fell 32.27 points or 0.45% to 7,150.29. The FTSE 100 gained 0.70 points or 0.06% to 5,757.60.

EU27 households spent more towards housing and food

According to results released by the European Statistical office, a third of household expenditure in the EU27 in 2005 was spent on housing, including utilities & furniture (33.1%), and almost a fifth on food, beverages & tobacco (19.4%).

The other half of the expenditure was mainly dedicated to transport (11.9%), recreation & culture (8.4%), clothing & footwear (5.7%), restaurants & hotels (5.3%), health (3.4%), communications (3.3%) and education (1.0%).

Household expenditure on housing and furniture ranged from as low as 19% of total expenditure in Romania in to as high in Malta to 38%. The shares for food, beverages and tobacco ranged from 11% in Luxembourg and 12% in the United Kingdom and Sweden to 50% in Romania and 37% in Lithuania.

European Union Leaders face a cost of living protests

European Union leaders are to work out a plan of action. Truckers, taxi drivers and farmers are demanding that the EU fight the soaring cost of living. A sharp rise in food costs of more than 50% in the region in the last three years and fuel cost surge of 60% in the last eighteen months have sparked a wave of protests from France, Germany, Italy to the UK. Union workers are scheduling blockades in the capital Brussels.

Current account deficit stays elevated in Italy

The Bank of Italy reported current account deficit declined to 4.13 billion euros in April from 4.73 billion a year ago. In the month, current account surplus rose to 20 million euros from a deficit of 2 million euros a year ago. The official reserves at the end of the month declined to 64.9 billion euros from 65.17 billion euros.

Retail sales in May rise in the UK

Retail sales in May increased 3.5% from a year ago, a sharpest decline in the two decades after a revised data in April of a fall of 0.3%. From a year ago sales rose 8.1% in May and in April rose revised 3.8% from the earlier estimate of 4.2% increase. Sales volume for food stores rose 4.7% and non-food stores increased 9.9% and for the three-months to May sales volume rose 1.8% from the prior three months. Seasonally adjusted sales in the three months rose 5.4%.

Gainers and losers

Vallourec led the mid-day gainers in the CAC 40 index stocks with a rise of 4.4% to 209.08 euros followed by gains in Arcelormittal of 3.48% to 65.02 euros, in EDF of 2.48% to 64.01 euros, in Total of 2.22% to 52.74 euros and in Vinci of 0.93% to 41.18 euros.

Unibail- Rodamco led the decliners in the CAC 40 index with a loss of 3.43% to 150.36 euros followed by losses in BNP Paribas of 2.32% to 60.31 euros, in Alcatel- Lucent of 2.27% to 4.29 euros, in Peugeot of 2.18% to 35.73 euros and in Accor of 2.14% to 45.10 euros

Among the DAX 30 index shares, E.ON AG led the mid-day gainers with a rise of 1.56% to 129.96 euros followed by gains in Allianz of 1.52% to 118.78 euros, in Merck KGaA of 1.47% to 88.27 euros, in ThyssenKrupp of 1.29% to 41.17 euros and in RWE AG of 1.12% to 81.19 euros

MAN AG led the afternoon decliners in the DAX 30 index with a fall of 2.60% to 82.50 euros followed by losses in TUI AG of 2.45% to 15.16 euros, in Continental of 2.36% to 62.86 euros, in Deutsche Lufthansa of 2.04% to 14.90 euros and in Adidas AG of 1.87% to 43.47 euros.

Precious Metals Movement

At mid-day in London, gold lost $5.40 at $893.25 an ounce. Silver fell 15 cents to $17.22 an ounce, platinum slipped $34 to $2,075 an ounce and palladium traded unchanged at $464 an ounce.