European Markets Stable; German Deficit to Rise

Mayank Mehta
10 Dec, 2009
New York City

Markets in Europe stabilized today but face a heightened stress from the possible fallout from Greece and Ireland. German federal deficit in 2010 is expected to increase to 6% of GDP. Inditex nine months net declines. Daimler AG and its workers reach an agreement to maintain jobs till 2013.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – Markets in Europe stabilized today but face a heightened stress from the possible fallout from Greece and Ireland. German federal deficit in 2010 is expected to increase to 6% of GDP. Inditex nine months net declines. Daimler AG and its workers reach an agreement to maintain jobs till 2013.[/R]

Markets in Europe stabilized a day after worries about a possible debt default in Greece and Ireland subsided.

In London FTSE 100 Index closed higher 40.48 or 0.78% to 5,244.37, in Paris CAC 40 Index increased 40.99 or 1.09% to close at 3,798.38, in Frankfurt DAX index higher 61.18 or 1.08% to close at 5,709.02. In Zurich trading SMI increased 58.93 or 0.93% to close at 6,410.64.

German finance minister said that federal budget deficit in 2010 will surge to 6% and total debt will increase to 78% from 73% of GDP. The federal revenues are expected to be €603.5 billion and spending of €749 billion. Fiscal federal deficit is expected to be 6% of GDP in 2010 from the 3% this year.
RWI institute in Germany raised its outlook for the economy in 2010 to 1.6% growth from the previous estimate of 1.2%. Higher exports and government spending is expected to contribute to higher growth estimate.

Gainers & Losers

Aeroports de Paris SA added 1.2% to €50.89 after the airport group was upgraded to “outperform” from “underperform” at Cheuvreux a day after company guided better than expected operating earnings outlook for the current year.

Allianz SE the property and casualty insurer added 1.0% to €82.64.

Bayer AG advanced 1.0% to €53.02 after the drugmaker successfully completed a first phase II trial with Schering for the drug Riociguat for the treatment of pulmonary hypertension owing to interstitial lung disease.

Celesio AG the drug wholesaler rose 0.2% to €17.57.

Daimler AG fell 0.1% to €34.83 after the luxury-car maker has reached an agreement with workers union that gives job security until the end of 2019 to 37,000 employees at its biggest plant in Germany.

Eiffage SA fell 0.8% to €39.26 after the construction company was downgraded to “sell” from “reduce” at AlphaValue.

E.ON AG the energy supplier rose 0.6% to €27.27.

France Telecom S.A decreased 1.1% to €16.97 after the telecom carrier was downgraded to “underperform” from “neutral” at Exane BNP Pariba.

Fraport AG declined 0.2% to €34.39 after the owner and operator of the international airport said that the number of passengers through the airport decreased 0.2% from a year ago to 3.9 million at its Frankfurt airport.

Groupe Partouche SA climbed 4.4% to €2.81 after the casino operator was upgraded to “add” from “reduce” at Oddo Securities.

Industria de Diseno Textil SA the textile industry said nine months sales rose 5.4% to €7.8 billion from €7.4 billion a year ago. Net profit in the nine months fell 1.4% to €831 million or 133 cents per diluted share compared to net profit of €843 million or 136 cents per share a year ago.

MagForce Nanotechnologies AG closed unchanged at €44.40 after the developer of medical technologies said that it has appointed Dr. Peter Heinrich, until now the Company’s deputy chairman of the supervisory board, as its new Chief Executive Officer effective January 1, 2010.

Manz Automation AG increased 4.9% to €59.00 after the solar-cell machine maker said that it has acquired several orders with a totaling at least €15 million.

PSA Peugeot Citroen S.A increased 0.3% to €23.36 after the carmaker was upgraded to “buy” from “reduce” at Kepler.

Publicis Groupe S.A fell 1.4% to €26.92 after the advertising and marketing services provider was downgraded to “neutral” from “overweight” at JPMorgan Chase & Co.

SAP AG the business management software developer rose 0.5% to €30.26.

Volkswagen AG the automaker climbed 1.9% to €80.86.

DAX Index Movers

Adidas AG led the decliners in the DAX index of 0.93%, followed by losses in MAN SE of 0.59%, in Deutsche Lufthansa AG of 0.35%, in BMW AG of 0.19%, and in Fresenius Medical Care AG & Co. KGaA of 0.14%.

K+S AG led gainers in the DAX index with a rise of 2.91% followed by increase in Bayer AG of 2.20%, in Siemens AG of 1.84%, in Deutsche Bank AG of 1.81%, and in BASF SE of 1.78%.

CAC-40 Index Movers

Unibail-Rodamco SA led the decliners in the CAC-40 index of 1.67%, followed by losses in Michelin SCA of 0.53%, in Bouygues SA of 0.50%, in Alcatel Lucent of 0.39%, and in PPR SA of 0.36%.

ArcelorMittal gainers in the CAC-40 index with a rise of 4.24% followed by gainers in Credit Agricole SA of 3.21%, in STMicroelectronics N.V. of 2.33%, in Alstom SA of 2.25%, and in Danone SA of 2.22%.