European Markets Lower; Sanofi Drops 8%

Darlington Musarurwa
26 Jun, 2009
New York City

German inflation hovered near zero in June and French consumer confidence increased but still remained lower. First quarter French GDP decreased 1.2%. Sanofi-Aventis dropped 8.1% after European study group of diabetes suggested more research to investigate linkage between Lantus insulin and cancer.

[R]8:00 PM Frankfurt, Paris; 2:00 PM New York – European indexes closed lower. German inflation hovered near zero in June and French consumer confidence increased but still remained lower. First quarter French GDP decreased 1.2%. Sanofi-Aventis dropped 8.1% after European study group of diabetes suggested more research to investigate linkage between Lantus insulin and cancer.[/R]

The preliminary read on the consumer price index in Germany suggested that the inflation is near zero. The CPI is estimated to increase at 0.1% in June from a year ago month and increase 0.4% from May.

The French statistics office Insee reported that first quarter GDP declined 1.2% compared to a year ago. International trade contributed -0.1% to GDP growth and inventory change contributed -0.7%.

The French consumer confidence increased 3 percentage point but still remained low.

Gainers & Losers

Porsche Automobile Holdings SE declined 1.8% to 45.50 euros after the company said it is in final stage of discussion with Qatar to invest in the company or explore sale of stake in Volkswagen.

Volkswagen increased 2.9% to 249.40 euros and Daimler AG increased 1.6% to 25.79 euros.

Allianz SE dropped 2.4% to 63.19 euros and the insurer has now declined from 72 euros price at the beginning of the month.

Envitec Biogas AG surged 8.5% to 16.33 euros after the board approved a dividend of 30 euro cents a share and estimated revenues in the current year between 150 million euros and 200 million.

Sanofi-Aventis SA declined 8.1% to 40.85 euros after the European Association for the Study of Diabetes asked for more research on the Lantus diabetes drug and link to cancer.
A German study of 127,000 patients in an insurance database that took Lantus insulin and those diagnosed with cancer showed “statistically significant” link.

The news was first reported in the association’s journal Diabetologia but the association said people taking the insulin should continue taking the medicine until further research data is available.

Air Liquide SA increased 1.2% to 65.71 euros after UBS revised its outlook on the largest industrial gas maker with ‘buy’ rating from ‘neutral.’

Europe Markets Review

In London FTSE 100 Index closed lower 11.56 or 0.27% to 4,241.01, in Paris CAC 40 Index decreased 33.37 or 1.05% to close at 3,129.73 and in Frankfurt DAX index lower 24.09 or 0.50% to close at 4,776.47. In Zurich trading SMI increased 14.69 or 0.27% to close at 5,375.99.

DAX Index Movers

E.ON AG led the decliners in the DAX index of 3.41% followed by losses in Allianz SE of 2.61%, in K+S AG of 2.55%, in Hannover Rueckversicherung AG of 2.50%, in METRO AG of 2.28%.

Volkswagen AG led gainers in the DAX index with a rise of 2.68%, followed by increase in Daimler AG of 0.94%, in Linde AG of 0.78%, in Bayerische Motoren Werke AG of 0.58%, in Deutsche Bank AG of 0.46%.

CAC-40 Index Movers

Sanofi-Aventis led the decliners in the CAC-40 index of 8.10% followed by losses in PSA Peugeot Citroen S.A. of 5.44%, in Dexia SA of 2.98%, in Bouygues SA of 2.43%, in Electricite de Strasbourg SA 2.10%.

EADS NV gainers in the CAC-40 index with a rise of 3.46% followed by gains in Cap Gemini SA of 2.06%, in Lafarge S.A. of 1.75%, in ArcelorMittal of 1.52%, in Air Liquide SA of 1.15%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 42 increased, 58 declined and 2 were unchanged.

Invensys plc decliners in the FTSE 100 index with a loss of 2.44% followed by losses in The Sage Group PLC of 2.00%, in Eurasian Natural Resources Corporation PLC of 1.95%, in SABMiller plc of 1.88% and in BT Group plc of 1.75%.

Petrofac Limited led gainers in the FTSE 100 index with a rise of 4.63% followed by increase in The Royal Bank of Scotland Group plc of 3.74in Marks and Spencer Group plc of 2.97%, in Wolseley PLC of 2.78%, in Old Mutual plc of 2.56%.