Philips Earnings Lift European Trading Sentiment

Mayank Mehta
12 Oct, 2009
New York City

European markets closed higher as a rally in the region lifted tech and banking stocks. Philips NV reported better than expected earnings. Vivendi SA sued two French shareholders and an association for participating in a class action lawsuit in New York. Dollar trades weak against euro.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European markets closed higher as a rally in the region lifted tech and banking stocks. Philips NV reported better than expected earnings. Vivendi SA sued two French shareholders and an association for participating in a class action lawsuit in New York. Dollar trades weak against euro.[/R]

European markets increased as investors showed a willingness to bid up stocks ahead of earnings. Philips reported better than expected earnings and that contributed to the positive trading sentiment.

In London FTSE 100 Index closed higher 48.30 or 0.94% to 5,210.17, in Paris CAC 40 Index increased 46.19 or 1.22% to close at 3,845.80, in Frankfurt DAX index higher 71.35 or 1.25% to close at 5,783.23. In Zurich trading SMI increased 86.14 or 1.37% to close at 6,377.78.

Dollar declined against euro and traded as low as $1.489 as central banks around the world lower their exposure to the embattled currency.

Gainers & Losers

Beiersdorf AG increased 1.3% to €41.69 after the pharma and consumer products maker was upgraded to “neutral” from “underperform” at Credit Suisse Group AG.

BMW climbed 2.5% to €33.67 and the company launched its BMW Z4 in India.

Commerzbank AG added 2.2% to €8.48 after the bank agreed to sell its Dresdner Van Moer Courtens and the Belgian branch of its subsidiary Commerzbank International S.A. Luxembourg which focuses on private banking to a management led buyout.

Cegedim SA increased 3.8% to 70.07 after Cheuvreux lifted its stock rating to “outperform” from “underperform.”

Cie Saint-Gobain SA increased 4.7% to 39.23 after La Lettre de L’Expansion noted that second half earnings will be higher than in the first half.

Continental AG advanced 2.7% to €40.83 after the automotive industry supplier is expected to name its new finance chief on October according to local German media. In an interview with Handelsbaltt, a company executive said that its tire unit is likely to show slightly higher revenue in 2010.

Deutsche Lufthansa AG rose 0.9% to €11.92 after the airline said it plans to reintroduce wireless Internet access for a long distance flights.

Deutsche Telekom AG climbed 1.1% to €9.43 and the phone company said it plans to sign an outsourcing contract with Philips.

Dialog Semiconductor Plc surged 9.9% to €4.88 after the semiconductor maker said is pleased to announce that during September and October the company has seen demand above expectation for its products used in smart phones and mobile audio devices and a rebound in demand for automotive related products. This has translated into increased sales and a solid sales backlog as company enters its traditionally strong fourth quarter.

Fiat SpA, Renault and PSA Peugeot Citroen increased between 4% and 6% after a rally in the region lifted automakers.

Heidelberger Druckmaschinen AG plunged 17.5% to €6.08 after the maker of printing presses warned last week that it expects to report a loss before interest and taxes of between €110 million and €150 million for the current fiscal year.

Heineken N.V decreased 2% to €30.01 after the Dutch brewer was downgraded to “neutral” from “buy” at UBS AG.

Kloeckner & Co SE increased 4.1% to €18.28 after the steel trader was upgraded to “buy” from “hold” at Deutsche Bank.

Koninklijke Philips Electronics N.V added 6.1% to €18.08 after the electronics maker said third quarter sales fell 11.5% to €5.6 billion from €6.33 billion a year ago. Net profit in the quarter rose 205% to €174 million or€0.19 per diluted share compared to net profit of €57 million or €0.06 per share a year ago.

MAN SE rose 1.7% to €58.26 after the truck maker received clearance from Chinese authorities to form a partnership with Sinotruk, China’s market leader for such vehicles.

RWE AG rose 0.5% to €63.41 after the utility may be asked to bid again for Poland’s Enea SA.

Vivendi SA increased 1.3% to 20.66 and separately the company sued two shareholders and a association and said that shareholders that bought stocks in Paris are regulated by French laws.

DAX Index Movers

E.ON AG led the decliners in the DAX index of 0.72% followed by losses in Adidas AG of 0.43%, in Deutsche Post AG of 0.39%.

Infineon Technologies AG led gainers in the DAX index with a rise of 4.49% followed by increase in Salzgitter AG of 3.80%, in Volkswagen AG of 3.12%, in Siemens AG of 2.60%, in BASF SE of 2.51%.

CAC-40 Index Movers

Pernod Ricard SA led the decliners in the CAC-40 index of 1.49% followed by losses in Veolia Environnement of 0.79% in Gdf Suez SA of 0.33%, in Suez Environnement SA of 0.32%.

Alcatel Lucent gainers in the CAC-40 index with a rise of 5.04% followed by gainers in Compagnie de Saint-Gobain SA of 4.68%, Renault SA of 4.21%, in Lagardere SCA of 4.07%, in STMicroelectronics N.V. of 3.56%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 78 increased, 22 declined and 2 were unchanged.

Lloyds Banking Group Plc decliners in the FTSE 100 index with a loss of 2.54% followed by losses in Thomas Cook Group Plc of 2.06%, in National Grid Plc of 1.50%, in Serco Group Plc of 1.43%, in Centrica Plc of 1.35%.

Old Mutual Plc led gainers in the FTSE 100 index with a rise of 4.56% followed by increase in Man Group Plc of 3.63%, in Amec Plc of 3.13%, in Johnson Matthey Plc of 3.02%, in London Stock Exchange Group Plc of 2.96%.