Banks in Germany, Autos in France Gain

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

European market indexes edged lower despite a rise in banks in Frankfurt and auto stocks in Paris. France is expected to unveil a second bailout package for the auto inustry and is likely to commit as much as 6 billion euros. Banks rose after Barclays in UK reported better than expected earnings.

[R]1:00PM New York, 6:00 Frankfurt – European Stocks drop despite gains in banks and automakers.[/R]

European stocks closed on the downside despite strong gains by banks in Germany and automakers in France as the U.S. bank bailout and stimulus plans drag.

The French government announced a second bail-out package for the car industry worth between 5 billion and 6 billion euros.

Top Gainers

Deutsche Bank surged 4.9% after Equinet AG upgraded its rating. Above-expectation second-half earnings by Barclay’s, UK’s third largest bank, also lifted bank stocks in Germany. Commerzbank added 7.4%.

PSA Peugeot Citroen and Renault SA, France’s biggest automakers, surged on the prospects of a huge bail-out. Renault SA surged 5.8% and PSA Peugeot Citroen rose 4.1%.

Market sentiment

In Frankfurt the DAX Index eased 0.2% or 7.03 to 4,637.60. Of the 30 index shares, 15 gained and 15 lost.

Infineon Tech led the gainers with a gain of 7.5% followed by gains in Commerzbank of 7.4%, in Linde AG of 4.9%, in Deutsche Bank of 4.9%, and in Man AG of 4.7%.

E.ON AG led decliners with a loss of 4.8% followed by losses in Salzgitter AG of 2.8%, in Deutsche Telkom of 2.4%, in RWE AG of 2.2%, and in Seimens of 1.9%.

In Paris the CAC-40 Index closed down 0.5% to 3,113.48 despite significant gains in carmakers.

Renault led the advancers with a gain of 5.8% followed by gains in Dexia of 4.5%, in Peugeot of 4.1%, in Unibail-Rodamco of 4% and in Michelin of 3.9%.

GDF Suez led decliners with a fall of 4.1% followed by losses in CAP Gemini of 3.4%, in Societe Generale of 2.8%, in Credit Agricole of 2.8% and in EDF of 2.3%.

Deutsche Bank

Equinet AG upgraded its rating of Deutsche Bank, Germany’s biggest bank by market capitalization, from “hold” to “buy” after the company revealed during its annual press conference last week that it expected better performance this year after revenue picked up in January. The equity group in a report suggested that Deutsche Bank was returning to profitability.

French car industry bailout]

The French government announced a second bail-out package for the car industry worth between 5 billion and 6 billion euros in addition to the incentives unveiled in December.

According a statement from the president’s office, President Nicholas Sarkozy would reveal details of the rescue plan to the country’s auto industry later today.

The government pledged to bail out the country’s leading automakers, PSA Peugeot Citroen and Renault SA, in January as the gloomy economic outlook continues to depress global car demand.