European Markets Decline; ING, Deutsche Down

Mayank Mehta
26 Oct, 2009
New York City

Banks and insurers fell after cautious comments from Deutsche Bank. The nuclear reactor builder Areva SA completed

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – Banks and insurers fell after cautious comments from Deutsche Bank. The nuclear reactor builder Areva SA completed €750 million 10-year bond offering. The Dutch bank ING Groep NV plungesd on the plans to raise €7.5 billion in rights offering.[/R]

European markets turned lower in the afternoon after the weakness in the U.S. stocks and commodities prices. The dollar traded near its recent highs but was more usual volatile. Currency speculators are looking for the dollar to rebound against the euro and pound to regain as well.

In London FTSE 100 Index closed lower 50.83 or 0.97% to 5,191.74, in Paris CAC 40 Index decreased 63.79 or 1.68% to close at 3,744.45, in Frankfurt DAX index lower 98.09 or 1.71% to close at 5,642.16. In Zurich trading SMI decreased 74.71 or 1.17% to close at 6,303.35.

Insurers and banks were under the pressure after comments from Deutsche Bank sparked worries that more capital may have to be raised by the banks. Deutsche Bank decreased 4.2% to 50.70 after Germany management board leader Juergen Fitschen estimated difficult first half in 2010 but left the loan loss provision unchanged.

Gainers & Losers

Air France-KLM rose 0.3% to €11.35 and the airline has asked pilots to follow stricter safety procedures observance, following a fatal crash in June, French newspaper La Tribune reported.

Areva SA advanced 2.1% to €382.95 after the builder of nuclear reactors said today priced €750 million 10-year bond issue due on November 6, 2019 with an annual coupon of 4.375%.

BASF SE added 0.5% to €39.37 after the chemical maker was downgraded to “neutral” from “overweight” at JPMorgan Chase & Co.

Boiron SA the homeopathic drugmaker increased 6.7% to €27.19.

BMW AG the luxury carmaker edged up 0.3% to €36.07.

Centrotec Sustainable AG the supplier of energy-saving systems and high-performance materials for the construction industry declined 1.0% to €9.10.

Devoteam SA the IT consulting company rose 1.0% to €20.46.

ING Groep N.V plunged 11.1% to €15.44 after the troubled Dutch financial services group plans to raise through preferential subscription rights for holders of ordinary shares of up to €7.5 billion. Goldman Sachs International and J.P. Morgan are underwriters of the rights issue.

Kontron AG rose 1.9% to €8.50 after the maker of miniature computers for slot machines and drone aircraft said nine months net income fell €13.7 million from €25.4 million a year ago.

LVL Medical Group the supplier of medical equipment for home treatment climbed 2.4% to €16.50.

Merck KGaA fell 2.4% to €67.81 after the pharmaceutical and chemicals maker said a 28% drop in quarterly net profit and firmed up sales guidance for 2009.

Mobistar SA added 0.4% to €46.72 after the mobile phone operator reported third quarter sales fell 2% to €386.1 million from €393.8 million a year ago. Net profit in the quarter fell 4.8% to €67.1 million or €1.12 per diluted share compared to net profit of €70.5 million or €1.14 per share a year ago.

PSA Peugeot Citroen S.A decreased 0.9% to €23.67 after the carmaker is open to a reduction of its stake in car parts manufacturer Faurecia, according to a report in Les Echos on Monday.

Societe des Produits Marnier Lapostolle SA the liqueurs maker closed unchanged at €4,050.00.

Siemens AG gained 0.2% to €65.79.

AB Volvo surged 9.6% to €10.43 after the truck maker reported third quarter sales fell 31% to SEK48.5 billion from SEK69.8 billion a year ago. Net loss in the quarter was SEK2.92 billion or SEK1.44 per diluted share compared to net profit of SEK 2.00 billion or SEK0.98 per share a year ago.

Volkswagen AG increased 2.1% to €117.50 and the car maker said Lamborghini S.p.A. announced the official opening of Lamborghini Sao Paulo as part of its global dealership network expansion and development program.

Wacker Chemie AG the supplier of polysilicon for semiconductors rose 0.9% to €107.99.
DAX Index Movers

Deutsche Bank AG led the decliners in the DAX index of 4.00% followed by losses in Allianz SE of 3.89%, in Merck KGaA of 3.81%, in Commerzbank AG of 3.20%, in K+S AG of 2.45%.

Bayer AG led gainers in the DAX index with a rise of 1.30% followed by increase in Henkel AG of 0.19%, in RWE AG of 0.16%, in Deutsche Telekom AG of 0.05%.

CAC-40 Index Movers

Technip led the decliners in the CAC-40 index of 4.85% followed by losses in Credit Agricole SA of 4.57% in Dexia SA of 4.36%, in Alcatel Lucent of 3.85%, EADS NV of 3.30%.

L''Oreal SA gainers in the CAC-40 index with a rise of 0.91% followed by gainers in Electricité de France of 0.81%, Danone SA of 0.61%, in Pernod Ricard SA of 0.23%.