European Markets Turn Lowe; K+S Plunges

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

European markets closed lower. Michelin plans to eliminate 2,900 positions in France. K+S lowered its outlook for the production and potash fertilizer prices for the second half. Aeroports de Paris completed Sfr 250 million bond offering.

[R]7:00 PM Paris, Frankfurt; 1:00 PM New York – European markets closed lower. Michelin plans to eliminate 2,900 positions in France. K+S lowered its outlook for the production and potash fertilizer prices for the second half. Aeroports de Paris completed Sfr 250 million bond offering.[/R]

European stocks closed lower after industrial stocks declined on the worries that global economic recovery may be months away. The construction across Europe rebounded and trade surplus increased in April but UK unemployment increased.

The euro area trade surplus in April increased to 2.2 billion euros compared to 2.2 billion in the month a year ago. In March the trade surplus was 1.8 billion. For the wider region of 27 nations the trade deficit was 7.8 billion euros in the month compared to 14.9 billion a year ago month.

European Construction Rebounds

Across the euro zone of 16 nations, seasonally adjusted construction activities in April increased 0.6% after gaining 0.6% in March.

Across the wider euro are of 27 nations, the activities increased 0.7% in the month after edging 0.1% in March.

Compared to a year ago output dropped 4.7% in the euro area and by 5.1% in the wider euro region.

UK Unemployment Rises

The UK unemployment rate was 7.2% for the three months to April 2009, up 0.7 percentage point over the previous quarter and up 1.9 percentage point over the year. The number of unemployed people increased 232,000 over the quarter and by 605,000 from a year ago, to reach 2.26 million.

Gainers & Losers

HeidelbergCement AG declined 5% to 26.49 euros despite Bloomberg News report suggested that the cement maker is close to renegotiating its debt of 8.8 billion with a consortium of banks.

Conergy AG declined 7.4% to 63 euro cents after the solar power components maker reported that its headquarters were searched by regulators for insider allegations.

K+S plunged 14% to after the company lowered its production outlook to between 4 and 4.5 million tons from 6 million tons in the second half for potash fertilizers and lowered its price estimate for the autumn sales to 435 euros from 555 euros.

Michelin SCA declined 4.7% to 40.94 euros after it announced he plan to eliminate 2,900 positions in France. The company plans to cut 1,093 positions in the current year and the remaining positions through voluntary retirement in the next three years.

Aeroports de Paris SA plunged 8.4% to 50 euros after it completed Sfr 250 million bond offering that yielded 3.125% maturing on July 15, 2015. The company bonds were rated AA- by the rating agency S&P.

Klepierre SA increased 4.5% to 18.29 euros after the third largest property group in France said that it has renegotiated its debt covenants with a new credit facility of 2.4 billion euros. The company also plans to reduce its property portfolio to lower its loan to value ratio below 50%. BNP Paribas holds more than 50% stake in the commercial property and shopping centers developer.

Europe Markets Review

In London FTSE 100 Index closed lower 50.11 or 1.16% to 4,278.46, in Paris CAC 40 Index decreased 52.81 or 1.64% to close at 3,161.14 and in Frankfurt DAX index lower 90.74 or 1.86% to close at 4,799.98. In Zurich trading SMI decreased 74.81 or 1.39% to close at 5,302.29.

DAX Index Movers

K+S AG led the decliners in the DAX index of 13.20% followed by losses in Deutsche Post AG of 5.79%, in Salzgitter AG of 5.21%, in in Commerzbank AG of 4.91%, in ThyssenKrupp AG of 4.21%.

Deutsche Telekom AG led gainers in the DAX index with a rise of 2.77%, followed by increase in Fresenius Medical Care AG & Co. KGaA of 2.73%, in Fresenius SE of 2.46%, in Volkswagen AG of 1.91%, in adidas AG of 1.47%.

CAC-40 Index Movers

Dexia SA led the decliners in the CAC-40 index of 6.83% followed by losses in Vallourec SA of 6.68%, in ArcelorMittal of 6.35%, in Michelin SCA of 4.74%, in Lafarge S.A 4.61%.

Vivendi SA gainers in the CAC-40 index with a rise of 3.26% followed by gains in France Telecom S.A. of 1.58%, in Sanofi-Aventis of 1.45%, in L''Oreal SA of 1.01%, in Essilor International SA of 0.68%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 25 increased, 77 declined and None were unchanged.

Xstrata plc decliners in the FTSE 100 index with a loss of 10.19% followed by losses in Lonmin Plc of 8.46%, in Kazakhmys PLC of 7.91%, in Rio Tinto plc of 7.83% and in Vedanta Resources plc of 7.36%.

Vodafone Group Plc led gainers in the FTSE 100 index with a rise of 3.71% followed by increase in BT Group plc of 3.02%, in BAE Systems plc of 2.60%, in AstraZeneca PLC of 2.54%, in Reed Elsevier plc of 1.86%.