European Indexes Decline; Accor Falls

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

European market indexes dropped for the fourth day in a row. Indexes declined today on the weak U.S. home sales report and worries that banks may need more capital. EU issues guidelines to segregate toxic bank assets and puts limitation on dividend and executive compensation. Accor chairman quits.

[R]1:00PM New York, 6:00 Frankfurt – European stocks fall for the fourth day in a row. EU unveils guidelines for managing toxic assets.[/R]

Stocks gained in Europe retreated further after January existing home sales declined. European companies profit out look is cloudy many companies in Europe are exposed to the U.S. economic cycle.

The European Union also unveiled guidelines on how the 27-member bloc plans to manage toxic assets.

Market Sentiment

In Frankfurt trading the DAX 30 Index fell 1.3% or 49.54 to 3,846.21. Of the DAX index shares, 6 gained and 24 lost.

Henkel AG led advancers with a gain of 5% after the detergent manufacturer reported a rise in fourth-quarter profit. Deutsche Boerse climbed 4.4% after earnings beat analyst forecasts, followed by gains in BMW of 2%, in Metro AG of 0.9% and K+S AG of 0.6%.

E.ON AG led decliners with a loss of 5.7%, followed by losses in Man AG of 4.3%, Volkswagen of 4%, in Allianz SE of 3.7% and ThyssenKrupp AG of 3.5%.

In Paris trading CAC 40 Index declined 0.4% to 2,696.92.

PPR led advancers and added 5.6%, followed by gains in Michelin of 5.4%, in BNP Paribas of 5.2%, in CAP Gemini of 3.8% and Schneider Electric of 2.1%.

Accor led decliners with a loss of 6.2% after Europe’s largest hotelier reported a 35% drop in full-year net profit, followed by losses in GDF Suez of 3.8%, in Axa of 3.8%, in EDF of 3.3% and Unibail-Rodamco of 2.9%.

EU Issues Guidelines for Toxic Impairments

The European Commission today released new guidelines for dealing with toxic assets in the 27-member group.

According to the report, the EC said the state aid should be sustainable and restricted to a “limited number of banks of systemic importance” to avoid debt refinancing problems given existing budgetary constraints by governments.

The banks will be required to restructure their operations, shareholders may have to endure losses and companies will restrict dividend payment and limit executive ompensation.

Accor Chairman and Director Quits

Accor SA, the largest hotelier in Europe reported that full-year net profit for 2008, including fewer capital gains, fell 35% to 575 million euros or 2.60 euros per share from 883 million or 3.92 euros in 2007.

Consolidated revenue for the group rose 2.8% to 7.739 euros. The hotel group however recorded gains in China and India.

Europe Markets Review

In London FTSE 100 Index closed higher 32.54 or 0.85% to 3,848.98, in Paris CAC 40 Index decreased 11.13 or 0.41% to close at 2,696.92 and in Frankfurt DAX index lower 49.54 or 1.27% to close at 3,846.21. In Zurich trading SMI decreased 20.52 or 0.43% to close at 4,702.50.