European Markets Down 1.2%; TUI Plunges

Sarla Buch
10 Jul, 2009
New York City

European markets are facing bearish investment sentiments as global economic recovery prospect dim. Italian industrial production in May was unchanged but French industrial output increased. UK wholesale prices declined. Arcelor Mittal is threatened with coal mining seizures in Siberia.

[R]7:00 PM Frankfurt, Paris; 1:00 New York – European markets are facing bearish investment sentiments as global economic recovery prospect dim. Italian industrial production in May was unchanged but French industrial output increased. UK wholesale prices declined.[/R]

The benchmark stock market indexes in Germany, France and Switzerland closed down more than 1% as the prospect of economic recovery dimmed. The French industrial production in May increased and wholesale price in UK fell at a faster rate in June.

Gainers & Losers

Arcelor Mittal declined less than 1% after the company was threatened with coal mine seizures in Siberia. The steelmaker, only a year ago acquired three mines from OAO Severstal for $720 million in 2008, plans to close two mines if demand for steel does not improve in the next few months.

Fraport AG declined 3.2% to 27.79 euros after it reported June passenger traffic declined 5.6%.

Deutsche Lufthansa AG decreased 1.7% to 8.58 euros after the EU regulators and the air lines remain far apart in their terms to acquire to Austrian Airlines AG.

ProsiebenSat.1 Media AG dropped 7.1% to 3.27 euros after Axel Springer AG lost its court appeal against regulatory takeover ban of the media company.

TUI AG plunged 5.9% to 3.96 euros after Goldman Sachs lowered the company rating to ‘neutral’ and analysts suggest liquidity crunch in the first half of next year. The largest European travel group controlled Hapag-Lloyd is suffering revenues declines.

According to Societe Generale research report TUI Travel has total debt of 1.7 billion pounds and liquidity of 870 million pounds. The research note was covered by Bloomberg News.

Renault SA declined 1.5% to 22.40 euros after its chief executive estimated year 2010 to be as difficult as 2009. The French and German auto sales are sustained on government stimulus of 1,000 euros and 2,500 euros respectively that expires at the end of this year.

PSA Peugeot Citroen declined 0.1% to 16.59 euros after it raised 1.5 billion euros in 2-year loan syndicated by 12 banks. The company recently received 3 billion euros loans from the French government.

Total SA declined 1.7% to 36 euros after crude oil prices fell for the seventh day in a row.

Europe Markets Review

In London FTSE 100 Index closed lower 31.49 or 0.76% to 4,127.17, in Paris CAC 40 Index decreased 42.84 or 1.42% to close at 2,983.10 and in Frankfurt DAX index lower 53.76 or 1.16% to close at 4,576.31. In Zurich trading SMI decreased 67.58 or 1.27% to close at 5,237.81.

DAX Index Movers

K+S AG led the decliners in the DAX index of 5.13% followed by losses in Deutsche Post AG of 3.67%, in Commerzbank AG of 2.50%, in Volkswagen AG of 2.50%, in Deutsche Lufthansa AG of 2.49%.

Salzgitter AG led gainers in the DAX index with a rise of 1.05% followed by increase in Bayerische Motoren Werke AG of 1.05%.

CAC-40 Index Movers

STMicroelectronics N.V. led the decliners in the CAC-40 index of 4.26% followed by losses in Vallourec SA of 4.22%, in Alcatel Lucent of 3.50%, in Alstom SA of 2.57%, in ArcelorMittal of 2.51%.

Dexia SA gainers in the CAC-40 index with a rise of 4.17% followed by gains in Cap Gemini SA of 1.85%, in Unibail-Rodamco SA of 1.77%, in Veolia Environnement of 0.79%, in Michelin SCA of 0.78%.