European Indexes Advance to 15-month High

Mayank Mehta
04 Jan, 2010
New York City

European indexes traded near fifteen month high as resource stocks lead the gainers. Energy prices rose after record low temperatures in the U.S., China and Korea. European investors

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European indexes traded near fifteen month high as resource stocks lead the gainers. Energy prices rose after record low temperatures in the U.S., China and Korea. European investors’ confidence registered an increase.[/R]

European markets closed higher on the first day of trading in 2010 on economic optimism and rising energy and metals prices. Metals prices increased after manufacturing expanded in China and India and energy prices gained after freezing temperatures in the eastern regions of the U.S.

In London FTSE 100 Index closed higher 87.46 or 1.62% to 5,500.34, in Paris CAC 40 Index increased 77.64 or 2% to close at 4,013.97, in Frankfurt DAX index higher 90.87 or 1.5% to close at 6,048.30. In Zurich trading SMI increased 85.53 or 1.31% to close at 6,631.44.

Novartis AG offered $39.3 billion to acquire the remaining stake in Alcon Inc. The pharmaceutical giant offered $180 a share for 52% stake controlled by Nestle SA and $153 a share to minority shareholders.

Total SA agreed to take 25% stake in the Barnet Shale formation energy field in North Texas for $800 million and agreed to pay as much as $1.45 billion over six years.

European investors’ confidence increase to minus 3.7 in January from minus 5.5 in December according to a research institute Sentix based in Germany.

Gainers & Losers

Allianz SE added 1.2% to €88.25.

Air Berlin Plc increased 4.8% to €3.94 after the discount airliner was upgraded to “buy” from “hold” by Deutsche Bank AG

EADS NV declined 0.9% to €13.95.

France Telecom S.A added 0.8% to €17.58 and the telecom operator and Egypt based Orascom Telecom Holding are likely to seek legal settlement to acquire Egyptian Co. for Mobile Services or Mobinil.

Fraport AG the operator of the Frankfurt airport rose 1.7% to €36.90 after the Euro am Sonntag cited chief financial officer Matthias Zieschang and said that the company may exceed 2009 earnings.

GfK SE an international provider of market research services rose 0.6% to €24.29.

Infineon Technologies AG climbed 0.7% to €3.89 after is targeting an operating-profit margin of more than 10% “as quickly as possible,” Focus reported, citing an interview with Chief Financial Officer Marco Schroeter.

Krones AG the manufactures machines and solutions for the beverage production added 0.6% to €35.72.

Metro AG the retailer advanced 1.0% to €43.03 and Munich RE the reinsurer fell 0.7% to €109.00.

Renault SA the carmaker advanced 3.4% to €37.46.

RWE AG rose 0.9% to €68.81.

Siemens AG rose 1.4% to €65.11 after the electronics engineering may sell bonds to take advantage of low interest rates before rate increase expected in 2011 after Frankfurter Allgemeine Zeitung cited chief finance officer Joe Kaeser.

Societe Generale SA the bank rose 1.4% to €49.65.

ThyssenKrupp increased 2.7% to €27.11 and Salzgitter added 2.6% to €70.20 after metal prices increased in London trading.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 2.13%, followed by losses in SAP AG of 0.55%, in Muenchener Rue AG of 0.43%, in E.ON AG of 0.12%, and in Merck KGaA of 0.02%.

Infineon Technologies AG led gainers in the DAX index with a rise of 6.11% followed by increase in K+S AG of 3.78%, in Salzgitter AG of 3.48%, in ThyssenKrupp AG of 3.33%, and in Deutsche Post AG of 3.11%.

CAC-40 Index Movers

EADS NV led the decliners in the CAC-40 index of 0.67%, followed by losses in Essilor International of 0.32%, in GDF Suez SA of 0.21%.

Renault SA gainers in the CAC-40 index with a rise of 5.52% followed by gainers in Alstom SA of 5.01%, in Vallourec SA of 4.80%, in Cap Gemini SA of 4.32%, and in Credit Agricole SA of 3.76%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 79 increased, 20 declined and 3 were unchanged.

Hammerson Plc decliners in the FTSE 100 index with a loss of 2.78% followed by losses in The British Land Company Plc of 2.75%, in Standard Life Plc of 2.17%, in Land Securities Group Plc of 1.75%, and in Legal & General Group Plc of 1.36%.

The Royal Bank of Scotland Group Plc led gainers in the FTSE 100 index with a rise of 9.93% followed by increase in Cairn Energy Plc of 6.73%, in Smiths Group Plc of 5.42%, in Eurasian Natural Resources Corporation Plc of 4.92%, and in Vedanta Resources Plc of 4.79%.