European Markets Slide 2%; Lufthansa, BMI Merger

Mayank Mehta
01 Oct, 2009
New York City

European markets edged lower between 1% and 2% after rising at the sharpest pace in the third quarter in ten years. Lufthansa AG is in talks to acquire 20% stake in UK based airline BMI held by SAS. Euro traded lower as central bankers talk up dollar.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European markets edged lower between 1% and 2% after rising at the sharpest pace in the third quarter in ten years. Lufthansa AG is in talks to acquire 20% stake in UK based airline BMI held by SAS. Euro traded lower as central bankers talk up dollar.[/R]

European markets decreased between 1% and 2% after steady rise in the third quarter. The indexes closed lower after Germany reported a decline in retail sales and euro edged lower.

Euro declined after comments from ECB President Jean-Claude Trichet. The central bank officials in Europe have been talking up dollar in the last one month.

Today, after a meeting of finance ministers of 16 member nations in Gothenburg, Sweden said, “There is very strong sentiment that we have a shared interest in a strong international financial system.” His comments were reported by Reuters and Bloomberg News.

Earlier on Sept 28, he had reiterated that it is “extremely important” that the U.S. dollar is strong.

In London FTSE 100 Index closed lower 86.09 or 1.68% to 5,047.81, in Paris CAC 40 Index decreased 74.64 or 1.97% to close at 3,720.77, in Frankfurt DAX index lower 120.61 or 2.13% to close at 5,554.55. In Zurich trading SMI decreased 68.01 or 1.08% to close at 6,255.17.

Retail sales in Germany decreased 1.5% in August from July when they increased 0.7% according to Federal Statistics Office in Wiesbaden. Only yesterday, Germany reported an increase in unemployment by 10,000 in September as economic recovery still eludes the exporting nation.

Gainers & Losers

Accor SA decreased 1.7% to €37.36 after the hotel company was downgraded to “underperform” from “neutral” at Exane BNP Paribas.

Bouygues SA added 1.9% to €35.41 after the builder and mobile-phone operator was upgraded to “buy” from “hold” at Citigroup Inc.

Daimler AG declined 0.1% to €34.37 after the carmaker said its Mercedes-Benz truck brand and Russian truck manufacturer Kamaz are planning to forge an additional joint venture as part of their alliance.

Dexia SA declined 0.3% to €6.28.

Demag Cranes AG rose 0.4% to €24.60 after the maker logistics and handling equipment was downgraded to “neutral” from “overweight” at HSBC Holdings Plc.

Deutsche Lufthansa AG fell 0.4% to €12.06 after the airline agreed to acquire 20% stake in UK based British Midland Plc for 19 million pounds.

France Telecom S.A edged down 0.8% to €18.04 after the company and Orange signed a 7-year deal to broaden existing partnership for $2 billion. Citigroup lowered its rating to “sell.”

Ingenico SA fell 2.5% to €18.51 after the maker of payment terminals was downgraded to “neutral” from “buy” at Goldman Sachs Group Inc.

MAN SE slipped 0.5% to €56.10 after the truckmaker said that Invesco AIM Management Group Inc. of the U.S. has amassed an equity stake carrying voting rights in the company amounting to 10.4% as of Sept 11.

Merck KGaA advanced 0.5% to €68.35 and the company submitted New Drug Application to the US Food and Drug Administration for Cladribine tablets, Merck Serono''s investigational oral formulation of cladribine as a therapy for reducing relapses in people with relapsing forms of multiple sclerosis.

Michelin SCA the tiremaker dropped 2.1% to €52.44 after chief executive in an interview with the Wall Street Journal that the economic recovery is still weak.

Renault SA increased 2.0% to €32.53 after the carmaker was upgraded to “buy” from “add” at Oddo Securities.

Sequana SA added 3.8% to €10.01 after the investment company said that it plans to sell its Autocopiants division.

Television Francaise 1 SA decreased 3.5% to €11.59 after the largest French television channel was downgraded to “underperform” from “neutral” at Credit Suisse Group AG.

DAX Index Movers

Man SE led the decliners in the DAX index of 5.05% followed by losses in ThyssenKrupp AG of 4.52%, in Basf SE of 4.38%, in Salzgitter AG of 3.81%, in Commerzbank AG of 3.73%.

Muenchener Rue AG led gainers in the DAX index with a rise of 0.96%.

CAC-40 Index Movers

Michelin SCA led the decliners in the CAC-40 index of 4.91% followed by losses in ArcelorMittal of 4.44%, in Compagnie de Saint-Gobain SA of 4.02%, in Bnp Paribas SA of 3.83%, Alcatel Lucent of 3.04%.

Vivendi SA gainers in the CAC-40 index with a rise of 0.26% followed by gainers in Bouygues SA of 0.23%, Unibail-Rodamco SA of 0.18%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 15 increased, 86 declined and 1 were unchanged.

Lonmin Plc decliners in the FTSE 100 index with a loss of 8.12% followed by losses in Eurasian Natural Resources Corporation Plc of 6.10%, in Anglo American Plc of 5.75%, in Xstrata Plc of 5.69%, in Segro Plc of 5.09%.

Vedanta Resources Plc led gainers in the FTSE 100 index with a rise of 2.37% followed by increase in Home Retail Group Plc of 2.35%, in Wolseley Plc of 1.33%, in Friends Provident Plc of 1.08%, in Aviva Plc of 0.96%.