EU Economy Shrinks 0.2%; Metro Falls

Mayank Mehta
07 Oct, 2009
New York City

European markets edged lower but stocks in general maintained their upward bias in the region ahead of earnings season. EU revised higher the economic outlook for the next two years and economy shrank 0.2% in the second quarter from the first. Beisheim sells 5.2% stake in discount retailer Metro AG.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European markets edged lower but stocks in general maintained their upward bias in the region ahead of earnings season. EU revised higher the economic outlook for this and next year after the economy in the region shrank 0.2% from the first. Credit Agricole backs Greece based Emporiki capital boost plan. Otto Beisheim sells 5.2% stake in discount retailer Metro AG.[/R]

European economic decline appears to have slowed. The statistical agency of 16-nations in Europe, eurostat reported GDP declined 0.2% in the second quarter from the first and fell 4.8% from a year ago.

The EU Commission forecasted economic growth in the third quarter of 0.2% and 0.1% in the last quarter of this year.

The bid to acquire a stake in the second largest mobile carrier in Brazil heated up. Telefonica SA offered 48 reais or $3.75 billion. Vivendi SA offered to acquire the company for 42 reais or $3 billion.

In London FTSE 100 Index closed lower 29.08 or 0.57% to 5,108.90, in Paris CAC 40 Index decreased 13.80 or 0.37% to close at 3,756.41, in Frankfurt DAX index lower 16.89 or 0.30% to close at 5,640.75. In Zurich trading SMI decreased 17.01 or 0.27% to close at 6,260.15.

Gainers & Losers

Air France-KLM decreased 0.6% to €12.47 after the airline said September passenger traffic dropped 3.7%, while capacity fell 4.9%, leading its load factor to rise 1% point to 81.9%.

Alstom SA declined 0.5% to €49.53 after the engineering company said China Railway Construction Corp Limited and Siemens AG are among bidders for a 450 km (280 mile) railway in Saudi Arabia.

Bilfinger Berger AG declined 2.8% to €48.58 after the builder was upgraded to “add” from “neutral” at WestLB AG.

Credit Agricole SA rose 1.4% to €15.02 after the banking group said on Wednesday it backs new restructuring efforts at Greece''s Emporiki Bank which include a €1 billion ($1.47 billion) capital boost.

Conergy AG the global manufacturer of products for the solar power generation surged 14.7% to €1.01.

DL Software surged 11.4% to €8.44 after the software developer said first-half net income increased 31% to €1.9 million.

EADS NV the aerospace and defense contractor rose 2.8% to €14.95.

Evolis SA the maker of plastic-card printing devices increased 2.3% to €10.49 after the company estimated higher margins for the second half but did not indicate range.

Easydentic SA the publicly traded supplier of security identification systems fell 3.3% to €7.25 after it reported a loss of €8.3 million compared to net income of €4.4 million a year ago.

GDF Suez SA rose 0.3% to €30.33 after the natural-gas network said to Valor Economico newspaper that Brazil based Vale is considering joining a group of companies including GDF in a bid for a hydroelectric power dam project in Brazil.

Groupe SEB SA increased 5.5% to €37.29 after the maker of countertop kitchen appliances was upgraded to “buy” from “neutral” at UBS AG.

Leoni AG increased 5.8% to €15.55 after the manufacturer and supplier of cables was upgraded to “hold” from “reduce” at Equinet AG.

Metro AG decreased 3.3% to €37.09 after the retailer Otto Beisheim Group said on Wednesday it has successfully sold a 5.2% stake.

Orapi SA declined 5.4% to €15.70 after the manufacturer of surface-treatment lubricants said that it has confirmed its revenue guidance in three years to €150 million and reported first half net income of €453,000 compared to €1.4 million a year ago.

PPR SA slipped 0.1% to €90.25 after the owner of the Gucci Group moved Wednesday to trim its sprawling business and plans to spin off its African retailer CFAO in an initial public offering before December.

Puma AG the sporting-goods maker rose 3.3% to €230.47.

S.T. Dupont SA closed unchanged at €0.23 after the luxury lighters and pens reorganized and implemented voluntary redundancy plan at its Faverges production site.

Suez Environnement SA fell 1.7% to €15.24 after the water company was downgraded to “hold” from “buy” at Citigroup Inc.

Vilmorin & Cie SA fell 2.6% to €78.45 after the seed producer said full-year net income rose 8.7% to €53 million from €44.3 million a year ago.

Vivendi SA rose 0.8% to €21.14 and jury was selected for a securities fraud trial in the Southern District of New York.

The class action law suit that includes foreign investors from the Netherlands, France and UK but does include investors from Austria and Germany seek compensatory damages. The lawsuit is only the second securities suit to go to a trial this year in New York.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 2.39% followed by losses in Adidas AG of 2.23%, in Salzgitter AG of 1.86%, in E.ON AG of 0.95%, in Infineon Technologies AG of 0.92%.

K+S AG led gainers in the DAX index with a rise of 2.27% followed by increase in Commerzbank AG of 1.70%, in Fresenius SE of 1.21%, in BASF SE of 1.20%, in Man AG of 1.00%.

CAC-40 Index Movers

Societe Generale SA led the decliners in the CAC-40 index of 5.94% followed by losses in Bnp Paribas SA of 1.96% in Vallourec SA of 1.85%, in Suez Environnement SA of 1.84%, Dexia SA of 1.75%.

Lagardere SCA gainers in the CAC-40 index with a rise of 5.02% followed by gainers in Alcatel Lucent of 3.78%, Eads NV of 2.30%, in Unibail-Rodamco SA of 1.85%, in Renault SA of 1.65%.