European Markets Rise; Aviva, Electrolux Surge

123jump.com Staff
04 Feb, 2009
New York City

European stocks advance on a rise in commodities. Euro tumbles against dollar and yen on weak retail sales. Eurostat reported December retail sales declined 1.6% compared to a year ago and revised November sales were lowered. Roche fell on weak earnings.

[R]1:00PM New York, 6:00 Frankfurt – European stocks advance on a rise in commodities. Euro tumbles against dollar and yen on weak retail sales.[/R]

European stocks edged higher buoyed by banks and commodities after crude oil and metal prices rose and expected forth-quarter earnings for banks in Germany looked positive.

The euro fell against dollar and yen after a report showed that retail sales in the euro zone fell in December on weakening spending. The report sparked worries that the deepening recession in Eastern Europe may spread and intensify across the euro zone.

Electrolux AB surged 9% to 68.25 kronor after it reported fourth quarter loss of 530 million kronor compared to net income of 1.58 billion kronor a year ago. The company announced a dividend cut.

Roche declined 9% to Sfr147.80 after net income dropped to Sfr 8.97 billion from Sfr 9.76 billon a year ago.

Aviva plc, the insurance company jumped 11% to 370 pence after it reported 9% increase in sales.

Market sentiment

In Frankfurt DAX index higher 117.83 or 2.69% to close at 4,492.79 on a rise in financial stocks.

Deutsche Bank led gainers on the hope that it may deliver better than expected earnings ahead of analyst expectations tomorrow. Postbank AG also rallied. The real estate firm Hypo Real Estate Holdings fell following delay in a government rescue plan.

In Paris the CAC 40 rose 3% or 86.60 to 3,068.99 Alcatel-Lucent SA climbed 7% after it recorded forth-quarter earnings and sales that surpassed forecasts.

Roche was on the downside after posting disappointing results. Mining stocks also firmed on a rise in metals prices.

Eurozone sales dip

Eurostat report showed that December sales in the Eurozone declined 1.6% relative to the comparable period a year ago.

The statistical agency also adjusted November sales downwards to 2.6% year-on-year. Euro fell against dollar and yen after the release of the report.

Kazakhstan, Belarus, Russia and Ukraine devalued their currencies as investors drain funds from emerging markets and commodities prices have fallen in the last year. The ruble in Russia dropped to 11-year low and Ukraine currency fell on an ongoing dispute for gas with Russia.

Kazakhstan devalued the local currency tenge 18%.

Europe Markets Review

In London FTSE 100 Index closed higher 64.14 or 1.54% to 4,228.60, in Paris CAC 40 Index increased 86.60 or 2.90% to close at 3,068.99 and in Frankfurt DAX index higher 117.83 or 2.69% to close at 4,492.79. In Zurich trading SMI increased 7.85 or 0.15% to close at 5,225.46.