Europe, UK Rates On Hold; Veolia Drops

Trupti Mehta
06 Aug, 2009
New York City

The European Central Bank left its reference lending rate at 1% and did not expand its bond purchase program. German factory orders increased 4.5% in June, fourth monthly gain on growing export orders. Veolia Environnment SA dropped 8% after it reported net income declined more than 45%.

[R]4:00PM Frankfurt, Paris; 10:00 AM New York – The European Central Bank left its reference lending rate at 1% and did not expand its bond purchase program. German factory orders increased 4.5% in June, fourth monthly gain on growing export orders.[/R]

The European Central Bank left its key lending rate unchanged at 1% and the Bank of England kept its key rate at 0.5%. The ECB did not expand its bond purchase plan but the Bank of England expanded its plan by £50 billion.

In London FTSE 100 Index closed lower 24.24 or 0.52% to 4,647.13, in Paris CAC 40 Index decreased 17.84 or 0.51% to close at 3,458.53 and in Frankfurt DAX index lower 64.01 or 1.18% to close at 5,353.01. In Zurich trading SMI decreased 27.87 or 0.47% to close at 5,911.91.

Factory orders in Germany increased 4.5% in June after adjusting for seasonality and price increases according to the Economy Ministry in Berlin. Export orders increased 8.3% and orders from outside euro-zone increased 4.8%.

The fourth monthly increase in a row suggested that manufacturing’s contribution may help economy to revive in the current quarter.

Gainers & Losers

BIC SA fell 4.6% to €44.90 after the manufacturer of stationery products said first-half sales fell 1.8% to €713.1 million from €700.5 million a year ago. Net profit in the first-half was flat at €70.6 million or €1.47 per diluted share compared to net profit of €70.6 million or €1.45 per share a year ago.

Deutsche Boerse decreased 2% to 51.93 euros after it reported weak earnings and several brokers lowered their target prices for the stock.

Erlingklinger AG decreased 1.8% to 12.35 euros after the auto parts maker reported second quarter net income of €8 million.

Klepierre SA dropped 0.2% to €22.69 after the real estate company said first-half net rental income rose 25.9% to €368.8 million from €292.9 million a year ago. Net profit in the first-half fell 14.4% to €68.9 million compared to net profit of €80.6 million a year ago.

ProSiebenSat.1 Media AG plunged 6.7% to 5.01 euros after second quarter net dropped 24% to €45.5 million.

Poweo SA rose 2.2% to €18.25 an independent electricity and gas supplier said first-half sales rose 7% to €264.9 million from €247.0 million a year ago.

Safran SA fell 2.8% to €10.95 after the provider of aero-engines, security services and defense technology said first-half revenues rose 1.8% to €5.15 billion from €5.06 billion a year ago. Net profit in the first-half rose 80% to €281 million or €0.70 per diluted share compared to net profit of €156 million or €0.38 per share a year ago.

Unibail-Rodamco SA advanced 2.2% to €130.00 after the commercial property investment company said first-half net rental income rose 5.5% to €633.8 million from €600.7 million a year ago. Net loss in the first-half was €1.3 billion or €14.55 per diluted share compared to net profit of €489.4 million or €5.35 per share a year ago.

Veolia Environnment SA dropped 8% to €22.42 after it reported net income declined more than 45% to €220.3 million on sales decline of 0.7% to €17.4 billion.