ECB Holds Rates; Total Rises, Air Berlin Falls

123jump.com Staff
04 Jun, 2009
New York City

The European Central Bank and the Bank of England left their interest rates unchanged. Retail sales in the EU-16 area edged up in April from March but unemployment in France increased to 9.1%.

[R]8:00PM Paris, Frankfurt; 2:00 PM New York – The European Central Bank and the Bank of England left their interest rates unchanged. Retail sales in the EU-16 area edged up in April from March but unemployment in France increased to 9.1%.[/R]

Investors find valuation stretched after a global rally that is now eleven weeks old. The stocks are facing uphill task as investors focus on growing debts in UK and U.S. and persistent worries about the effectiveness of the government stimulus.

Rates on Hold in Europe

The European Central Bank left its key lending rate at 1% and indicated no immediate plans to lower the rate any further. The ECB stayed firm and has no plan to purchase government bonds.

The Bank of England also left its interest rate unchanged at 0.5% and reiterated its plan to buy 125 billion pounds of government bonds.

April EU Retail Sales Rise

April retail sales in EU-16 region increased 0.2% compared to march and declined 2.3% from a year ago. Sales in the wider EU-27 region increased 0.5% from March but fell 1.4% from a year ago.

French Unemployment Rise

The unemployment at the end of first quarter in France increased to 8.7%, an increase of 1.1% from the fourth quarter a year ago.

In Paris, CAC-40 Index increased 2.38 or 0.07% to close at 3,312.03 and in Frankfurt DAX index higher 10.27 or 0.20% to close at 5,064.80.

Gainers & Losers

Steelmakers rallied in Frankfurt and in Paris on the hopes that economic revival will start with higher orders from steel. ThyssenKrupp AG increased 3.6% to 20.27 euros, ArcelorMittal declined 0.4% to 23.98 euros and Salzgitter AG added 1% to 67.47 euros.

Metro AG increased 1.2% to 35.83 euros, Arcandor AG declined 1.6% to 1.90 euros and PPR SA declined 2.2% to 60.67 euros.

German Vice Chancellor and Foreign Minister Frank-Walter Steinmeier said that decision regarding bailout of Arcandor may be taken as early as this weekend. He also said that insolvency at the retailer is not preferred.

Air Berlin Plc declined 7.7% to 3.73 euros after it planned to raise 38.8 million euros and passenger traffic in May fell 8% from a year ago.

Total SA increased 2% to 58.64 after it reported a discovery of condensed gas field near Bogota, Colombia.

Homair Vacances SA surged 6.8% to 2.35 euros after it reported booking for the eight months ending in May increased 21% from a year ago period.

DAX Index Movers

K+S AG led the decliners in the DAX index of 3.06% followed by losses in SAP AG of 1.85%, in Beiersdorf AG of 1.56%, in Adidas AG of 1.44%, in BASF SE of 1.29%.

ThyssenKrupp AG led gainers in the DAX index with a rise of 4.22% followed by gains in Volkswagen AG of 3.97%, in Bayer AG of 3.61% in Deutsche Bank AG of 2.84%, in Merck KGaA of 2.75%.

CAC-40 Index Movers

LVMH Moet Hennessy Louis Vuitton SA led the decliners in the CAC-40 index of 2.32% followed by losses in Danone SA of 2.26%, in Lafarge S.A. of 2.23%, in ING Prime Rate Trust of 2.23%, Credit Agricole SA 1.94%.

Sanofi-Aventis gainers in the CAC-40 index with a rise of 3.41% followed by gains in Alcatel Lucent of 2.64%, in PSA Peugeot Citroen S.A. of 2.19%, in AXA of 2.03%, in Dexia SA of 1.85%.

Europe Markets Review

In London FTSE 100 Index closed higher 3.52 or 0.08% to 4,386.94, in Paris CAC 40 Index increased 2.38 or 0.07% to close at 3,312.03 and in Frankfurt DAX index higher 10.27 or 0.20% to close at 5,064.80. In Zurich trading SMI increased 37.50 or 0.70% to close at 5,422.21.