European Markets Rally on Banks, Autos

123jump.com Staff
24 Apr, 2009
New York City

European stocks regained new momentum after banks and auto stocks closed higher. Earnings from American Express and less than expected loss at Ford lifted stocks in the sector. Energy and mining stocks closed higher in London and auto and banks led the gainers in Paris and Frankfurt markets.

[R]2:00 PM New York, 7:00 PM London – European stocks regained new momentum after banks and auto stocks closed higher. Earnings from American Express and less than expected loss at Ford lifted stocks in the sector.[/R]

FTSE 100 index surged 3.4% or 137.76 to 4,155.99 and for the week increased 1.5%. The FTSE All-Share Index added increased 3.3%.

Energy and mining companies rose after crude oil and copper prices edged higher. Kazakhmys Plc surged 8.2% to after a recommendation by the broker. BHP Billiton increased 3.6% to 1,435 pence and Xstrata Plc surged 14% to 600 pence.

The Office of National Statics in a statement said that the UK economy shrank 1.9% in the first quarter from the fourth quarter. The economy shrank 4.1% from a year ago on weak service sector and fall in production output.

Slowdown in manufacturing output deepened and contributed the most to the GDP decline the most with the fall of 6.2% compared to 4.9% decline in the previous quarter.

UK retail sales increased 0.3% in March lifting the retailers in trading. Retailers increased after Debenhams reported first quarter profit increase of 25%. Debenhams Plc increased 8.7% to 84 cents.

German Stocks Rebound on Banks

Automakers gained in European trading after Ford reported better than expected results and smaller than expected losses. Volkswagen gained 3.8% to 236.90 euros, Renault SA increased 3.4% to 23.31 euros and Daimler increased 3.5% to 27.27 euros. Volvo declined 1.8% to 54 Swedish Kronor after it reported second quarterly loss in a row.

Banks in UK, France and Germany gained after American Express reported better than expected earnings. Barclays increased 8.6% to 236 pence, BNP Paribas increased 4.8% or 1.75 euros to 38.41 euros and Deutsche Bank increased 1.52 euros to 41.09 euros.

In Frankfurt, Germany the DAX index increased 3% or 136.11 to 4,674.32. Of the 30 stocks in the DAX index, 26 increased and 4 declined.

Siemens AG led the gainers in the DAX index with a rise of 5% followed by gains in Salzgitter AG of 4.8%, in E.ON AG of 4.7%, in Deutsche Bank of 4.4% and in Fresenius SE of 4.1%.

Muenchener Rueckversicherungs led the decliners in the DAX index with a fall of 2.3% followed by losses of 1.33% in Deutsche Lufthansa, of 0.23% of Allianz SE and in Deutsche Post.

Valeo SA, French auto parts maker reported first quarter 2009 loss of 159 million euros compared to 43 million euros a year ago. Sales declined in the quarter by nearly 33% to 1.63 billion euros. The French automaker reported operating loss of 83 million euros after its Japanese affiliate Ichikoh Industries loss reported 35 million euros.

Valeo added 4 cents to 14.50 euros after the release of earnings.

Europe Markets Review

In London FTSE 100 Index closed higher 137.76 or 3.43% to 4,155.99, in Paris CAC 40 Index increased 94.23 or 3.13% to close at 3,102.85 and in Frankfurt DAX index higher 136.11 or 3.00% to close at 4,674.32. In Zurich trading SMI increased 89.15 or 1.77% to close at 5,113.05.