Spain, Greece, Ireland Debt Worries in Europe

Mayank Mehta
09 Dec, 2009
New York City

The weakness in banks dragged European markets lower at close. Investors fear that debt downgrades at Spain, Europe and emerging nations may generate more losses at banks. VW and Suzuki finalized their cross-investment and joint collaboration.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – The weakness in banks dragged European markets lower at close. Investors fear that debt downgrades at Spain, Europe and emerging nations may generate more losses at banks. VW and Suzuki finalized their cross-investment and joint collaboration.[/R]

European stocks traded volatile after rating agencies harden their views on Spain and Greece and make cautionary comments about the UK fiscal deficit. S&P put Spain debt on negative watch and Fitch cut its rating on Greek sovereign debt.

Volkswagen agreed to acquire 19.9% stake in Suzuki Motor Corp and the Japanese automaker will also acquire 1.3% minority stake in VW.

In London FTSE 100 Index closed lower 19.24 or 0.37% to 5,203.89, in Paris CAC 40 Index decreased 27.91 or 0.74% to close at 3,757.39, in Frankfurt DAX index lower 40.74 or 0.72% to close at 5,647.84. In Zurich trading SMI decreased 48.03 or 0.75% to close at 6,351.71.

Banks traded lower on the worries that debt downgrades for Spain and Greece and possible rating revision for Ireland, Latvia and emerging European countries debt may generate more losses for banks.

Gainers & Losers

Aeroports de Paris SA decreased 2.2% to €50.66 after the airport group said Wednesday it expects its earnings before interest, taxes, depreciation and amortization in 2010 will be in the same range as the €850 million to €880 million that it is expecting for 2009.

Beneteau SA increased 0.5% to €10.15 after the maker of sailboats was upgraded to “buy” from “reduce” at Kepler.

Deutsche Bank AG fell 1.0% to €47.82 and Commerzbank AG declined 0.7% to €6.05.

Cybergun the maker of plastic gun replicas added 8.2% to €8.76.

Fonciere des Regions SA advanced 0.7% to €70.30 an commercial real estate landlord was upgraded to “neutral” from “underweight” at JPMorgan Chase & Co.

K+S AG dropped 0.8% to €40.75 after the maker of potash was downgraded to “reduce” from “hold” at Equinet AG.

Netgem SA surged 12.0% to €3.53 after the manufacturer of Internet access devices said to propose an exceptional dividend of €1.36 per share, in cash and in shares of its subsidiary, VideoFutur Entertainment Group.

Publicis Groupe S.A gained 3.0% to €27.76 after the owner of Saatchi & Saatchi and Leo Burnett ad agencies was upgraded to “buy” from “hold” at Deutsche Bank AG.

Volkswagen AG advanced 1.7% to €80.28 after the automaker acquired 20% stake in the Japanese automaker Suzuki Motor Corp and formed an alliance to jointly develop small car technologies.

DAX Index Movers

Commerzbank AG led the decliners in the DAX index of 2.22%, followed by losses in Siemens AG of 1.78%, in Merck KGaA of 1.74%, in BMW AG of 1.53%, and in Muenchener Rue AG of 1.39%.

BASF SE led gainers in the DAX index with a rise of 1.38% followed by increase in Bayer AG of 0.86%, in Volkswagen AG of 0.85%, in Infineon Technologies AG of 0.74%, and in RWE AG of 0.38%.

CAC-40 Index Movers

AXA led the decliners in the CAC-40 index of 3.98%, followed by losses in Lagardere SCA of 2.82%, in Vallourec SA of 2.46%, in PSA Peugeot Citroen S.A. of 2.38%, and in Alcatel Lucent of 2.12%.

Unibail-Rodamco SA gainers in the CAC-40 index with a rise of 0.99% followed by gainers in ArcelorMittal of 0.74%, in Electricite de Strasbourg SA of 0.30%, in Bouygues SA of 0.18%, and in Air Liquide SA of 0.10%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 29 increased, 71 declined and 2 were unchanged.

Old Mutual Plc decliners in the FTSE 100 index with a loss of 6.44% followed by losses in Man Group Plc of 3.95%, in Resolution Limited of 3.46%, in Barclays Plc of 3.13%, and in Fresnillo Plc of 2.87%.

Segro Plc led gainers in the FTSE 100 index with a rise of 3.76% followed by increase in Xstrata Plc of 2.13%, in Standard Chartered Plc of 2.09%, in Rio Tinto Plc of 1.88%, and in Lloyds Banking Group Plc of 1.54%.