German Inflation to Zero; Adidas Surges 7%

Darlington Musarurwa
10 Jun, 2009
New York City

European stocks closed higher as energy prices gained. German inflation fell to zero, 22-year low and French manufacturing index declined. UK trade deficit increased. HeidelbergCement lowers its stake in Indonesian cement company and Accor sold 4% stake in Club Med.

[R]7:00 PM Frankfurt, Paris; 2:00 PM New York – European stocks closed higher as energy prices gained. German inflation fell zero to 22-year low and French manufacturing index declined. UK trade deficit increased. HeidelbergCement lowers its stake in Indonesian cement company and Accor sold 4% stake in Club Med.[/R]

German Consumer Price Index declined zero in May from 0.7% in April. The lowest inflation in 22 years was driven by falling prices travel and tourism, consumer durables and food. The rising energy prices may lift inflation index this month.

The French manufacturing index, excluding energy, declined 0.5% in April after falling 1.6% in March.

The Office of National Statistics in UK reported that total production output increased 0.3% in April from March. In the three months to April, the production output decreased 3.2% from previous three months and declined 12.6% from a year ago period.

The UK deficit on trade in goods and services was £3 billion in April, compared with the deficit of £2.7 billion in March revised from the deficit of £2.5 billion.

Gainers & Losers

Metro AG increased 2.7% to 36.33 euros after the company chief suggested that merger between Karstadt and Kaufhof will be spun off as a separate company and listed on a stock exchange.

Adidas AG surged 7% to 27.71 euros after the company indicated sales from soccer in 2010 may reach 1.3 billion euros.

Adidas in a press release noted, “According to the most recent independent market surveys, Adidas is the world’s leading football brand, with a market share of more than 34%. In core markets such as Germany, and also in North America, Adidas’ football market share is clearly over 50%.”

HeidelbergCement increased 6.7% to 28.70 euros after it sold 14% stake in Indocement Tunggal Prakarsa and lowered its holding to 51% in the Indonesian cement maker.

Accor SA sold 4% stake in Club Mediterranee SA to Credit Agricole SA for 10 million euros.

AXA SA closed 0.2% to 14.70 euros and Allianz SE added 1.4% to 68.88 euros as the underwriting team of insurance companies prepares to pay for losses from Air France crash.

AXA expects to pay $150,000 per passenger and may pay more to the crash victims families. The AMR Corp’s American Airlines crash in 2001 that killed 265 passengers cost more than $550 million.

DAX Index Movers

SAP AG led the decliners in the DAX index of 1.7% followed by losses in Deutsche Lufthansa AG of 1.4%, in Deutsche Telekom AG of 0.6%, in Volkswagen AG of 0.5%, in Fresenius Medical Care AG & Co KGaA of 0.1%.

Adidas AG led gainers in the DAX index with a rise of. 6.8% followed by gains in Merck KGaA of 3.9%, in BMW AG of 3.6%, in ThyssenKrupp AG of 3.4%, in Metro AG of 3.4% .

CAC-40 Index Movers

EADS led the decliners in the CAC-40 index of 2.1% followed by losses in Veolia Environmental Services North America of 1.9%, in DANONE of 1.4%, in Suez Environnement SA of 1.0%, Sanofi-Aventis SA of 0.7%.

STMicroelectronics NV gainers in the CAC-40 index with a rise of 6.0% followed by gains in Vallourec SA of 3.9% in ArcelorMittal of 3.4%, in Alcatel-Lucent of 3.3%, in PSA Peugeot Citroen S.A. of 3.1%.

Europe Markets Review

In London FTSE 100 Index closed higher 31.96 or 0.73% to 4,436.75, in Paris CAC 40 Index increased 18.54 or 0.56% to close at 3,315.27 and in Frankfurt DAX index higher 53.32 or 1.07 % to close at 5,051.18. In Zurich trading SMI increased 47.72 or 0.89% to close at 5,436.39.