Industrials in Germany Rise; Danone Discount

123jump.com Staff
29 May, 2009
New York City

In European trading stocks edged higher after industrial production in Japan increased. Germany reported zero inflation in May and retail sales decreased in April. The dollar declined against the euro. GM and Magna appear to be in a preliminary agreement for the sale of Opel division.

[R]8:00 PM Frankfurt, Paris; 2:00 PM New York – In European trading stocks edged higher after industrial production in Japan increased. Germany reported zero inflation in May and retail sales decreased in April. The dollar declined against the euro. GM and Magna appear to be in a preliminary agreement for the sale of Opel division.[/R]

The inflation in Euro zone decreased to zero in May according to the European community statistics agency Eurostat. The annual inflation in April was 0.6%.

Retail sales in April decreased 0.9% in April in nominal terms and fell 0.8% in real terms. After adjusting for seasonality and calendar variations, sales in nominal terms increased 0.9% and in real terms gained 0.5%.

Home prices in UK increased 1.2% in May, second monthly increase in three months on a steady fall in mortgage rates.

The dollar declined against euro as investors worry that U.S. government debt issuance may overwhelm the bond markets. One euro fetched $1.4118 and one British pound closed at $1.6139.

In Paris trading, CAC 40 Index increased 13.95 or 0.43% to close at 3,277.65 and in Frankfurt, DAX index higher 7.94 or 0.16% to close at 4,940.82.

Canada based Magna International Inc and GM are in the advanced stages of agreement on the broad guidelines for the sale of Opel. The agreement requires financing of as much as 1.5 billion euros from state and federal governments of Germany and immediate financing of at least 200 million euros from Magna. The details of agreement are still not available.

Fiat chief Sergio Marchionne in a conference in Montreal described the recent merger talks with GM and German government as “uneven” and “complicated.”

Gainers & Losers

Danone SA declined 2.5% to 35.13 euros after it priced its 3 billion euros rights offering at 24.73 euros, a discount of nearly 31% to its Thursday’s closing price. The cash raised in the offering will help company to repay some of the debt acquired at the time of the purchase of the Netherlands based Royal Numico NV.

NetBooster increased 2.6% to 2.67 euros after it completed the secondary offering of 2.5 million euros.

Suez Environnements SA increased 2.4% to 12.79 euros after the water utility company was upgraded by JP Morgan Chase to ‘overweight.’

Infogrames Entertainment SA decreased 4.8% to 4.90 euros after it reported annual revenues rose 51% to 136.4 million euros and net loss of 226.1 million euros on the account of transition and write down related to acquisition of Atari.

Deutsche Boerse closed up 2.7% to 61.54 euros after Bank of America recommended the stock and cited recent increases in trading volume in cash and derivatives markets.

HeidelbergCement increased 3.8% to 25.50 euros on a speculation that the company is likely to refinance its onerous debt. The largest German cement maker had been on an acquisition spree during easy credit times between 2005 and 2007.

Steelmakers and industrial companies closed higher on the optimism that 5.2% increase in industrial production is a positive indicator for German exports.

DAX Index Movers

Siemens AG led the decliners in the DAX index of 2.8% followed by losses in RWE AG of 2.0%, in Commerzbank AG of 1.8%, in Fresenius SE of 1.4%, in Merck KGaA of 1.1%.

Bayer AG led gainers in the DAX index with a rise of 3.5% followed by gains in Beiersdorf AG of 2.2%, in ThyssenKrupp AG of 2.0%, in Deutsche Boerse AG of 2.0%, in Volkswagen AG of 1.6% .

CAC-40 Index Movers

Carrefour SA led the decliners in the CAC-40 index of 2.6% followed by losses in DANONE of 2.4%, in Accor SA of 2.3%, in Schneider Electric SA of 2.2%, AIR FRANCE -KLM of 1.4%.

STMicroelectronics NV gainers in the CAC-40 index with a rise of 4.4% followed by gains in Dexia SA of 3.1% in Societe Generale SA of 3.0%, in PSA Peugeot Citroen S.A of 2.7%, in Michelin SCA of 2.5%.

Europe Markets Review

In London FTSE 100 Index closed higher 30.40 or 0.69% to 4,417.94, in Paris CAC 40 Index increased 13.95 or 0.43% to close at 3,277.65 and in Frankfurt DAX index higher 7.94 or 0.16% to close at 4,940.82. In Zurich trading SMI decreased 0.85 or 0.02% to close at 5,349.74.