EU Unemployment Rises; Volkswagen Soars 11%

Darlington Musarurwa
02 Jun, 2009
New York City

The euro region unemployment increased in April with Spain and Baltic nations leading. French producer price index declined in April at a faster rate in the last three months. Volkswagen surged on potential merger with Porsche. Bouygues SA operating profit plunged 55%.

[R]9:00 PM Frankfurt, Paris; 3:00 PM New York – The euro region unemployment increased in April with Spain and Baltic nations leading the region. French producer price index declined in April at a faster rate in the last three months. Volkswagen surged on potential merger with Porsche. Bouygues SA operating profit plunged 55%.[/R]

Stocks in Frankfurt and Paris were nearly unchanged after a week of rally in Europe and financial, commodities and industrial stocks closed higher. A better than expected existing home sales in the U.S. and improved credit conditions and rising mortgage approvals in the UK helped market sentiment.

French Producer price index in April declined 0.9% from March and dropped 6.4% from a year ago. The prices of imported industrial goods decreased 1.2% as metals and energy prices fell.

The seasonally adjusted unemployment in EU-16 region increased to 9.2% in April compared to 8.9% in March. The unemployment increased from 7.3% in the year ago period.

Compared with March, the number of persons unemployed increased by 556,000 in the EU-27 and by 396,000 in the euro area. The unemployment increased by 4.653 million in the EU-27 and by 3.100 million in the euro area from a year ago.

The Netherlands reported lowest unemployment of 3.0% and Austria of 4.2% and the highest rates in Spain of 18.1%, Latvia of 17.4% and Lithuania of 16.8%.

Gainers & Losers

Volkswagen AG surged 11.4% to 253.48 euros and Porsche Automobile Holdings SE increased 2.7% to 46.10 euros. The potential merger between the two companies squeezed short sellers who were betting on the VW stock to fall.

Deutsche Bank AG declined 2% to 48.28 euros but Deutsche Post AG closed higher.

Munich Re decreased 3.8% to 97.18 euros after Credit Suisse lowered its price target on the insurer on the expectations of lower than expected investment return for its portfolio.

Gildemeister AG surged 10.8% to 8.13 euros after BHF-Bank AG revised its rating to ‘buy’ from ‘reduce’ on the recent success in a trade show for solar energy machinery.

Ratings revision for AXA and Dexia SA lifted stocks of both. AXA added 1.9% to 14.16 euros and Dexia gained 11.8% to 5.05 euros.

France Telecom SA declined 1.2% to 16.54 euros after Egyptian regulatory agency ruled that the company must acquire all outstanding stocks of Egyptian Co. Mobile Services if it intends to take a stake of more than 2%. The Mobinil as know in Egypt closed nearly unchanged in Cairo trading.

Technip SA increased 1.6% to 36.24 euros after the company was awarded a field expansion contract by Anadarko Petroleum.

Renault SA increased 2.6% to 30.28 after it reported 12% increase in May auto sales on government incentives.

Bouygues SA increased 0.2% after it reported its operating profit plunged 55%.

Europe Markets Review

In London FTSE 100 Index closed lower 29.17 or 0.65% to 4,477.02, in Paris CAC 40 Index decreased 1.45 or 0.04% to close at 3,378.04 and in Frankfurt DAX index higher 1.50 or 0.03% to close at 5,144.06. In Zurich trading SMI increased 82.48 or 1.54% to close at 5,432.22.

DAX Index Movers

Deutsche Boerse AG led the decliners in the DAX index of 3.62% followed by losses in Muenchener Rueckversicherungs-Gesellschaft AG of 2.15%, in Deutsche Bank AG of 1.95%, in Bayer AG of 1.52%, in Merck KGaA of 1.24%.

Volkswagen AG led gainers in the DAX index with a rise of 10.57% followed by gains in Salzgitter AG of 2.83%, in Beiersdorf AG of 2.59%, in Bayerische Motoren Werke AG of 2.40%, in ThyssenKrupp AG of 2.38% .

CAC-40 Index Movers

PSA Peugeot Citroen S.A. led the decliners in the CAC-40 index of 3.96% followed by losses in GDF Suez SA of 1.26%, in France Telecom S.A. of 1.22%, in Sanofi-Aventis SAof 1.19%, Schneider Electric SA 1.08%.

Dexia SA gainers in the CAC-40 index with a rise of 11.82% followed by gains in Veolia Environmental Services North America Corp. of 4.37% in ING Prime Rate Trust of 4.36%, in Vallourec SA of 3.57%, in STMicroelectronics N.V. of 3.51%.

Europe Markets Review

In London FTSE 100 Index closed lower 29.17 or 0.65% to 4,477.02, in Paris CAC 40 Index decreased 1.45 or 0.04% to close at 3,378.04 and in Frankfurt DAX index higher 1.50 or 0.03% to close at 5,144.06. In Zurich trading SMI increased 82.48 or 1.54% to close at 5,432.22.