EU Unemployment at 10%; German Exports Rise

Mayank Mehta
08 Jan, 2010
New York City

European markets closed higher after Germany reported better than expected increase in exports. Unemployment in the region increased to 10%. The second read of the euro area GDP was unrevised at 0.4%. Airlines and airport operators increased after global traffic expanded in November.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets closed higher after Germany reported better than expected increase in exports. Unemployment in the region increased to 10%. The second of the euro area GDP was unrevised at 0.4%. Airlines and airport operators increased after global traffic expanded in November.[/R]

European markets declined as investors worried that rising unemployment in the region and the U.S. may hamper the uneven economic recovery.

European unemployment increased to 10% in November and the U.S. unemployment in December was unchanged at 10%. December U.S. payrolls declined 85,000. The larger than expected payroll decline dragged the European and U.S. indexes lower.

German unemployment rate was unchanged at 7.6% from October but situation in Spain and Lativa appear to be grim. The unemployment in Spain reached 19.4% and among people under 25 years of age reached 43.8%. Lativa’s unemployment rate increased to 22.3%.

During the third quarter, the euro area GDP increased 0.4% and in the EU27 it increased 0.3% from second quarter 2009. Seasonally adjusted GDP compared to the quarter a year ago decreased 4.0% in the euro area and 4.3% in the EU27 in the third quarter of 2009.

Seasonally adjusted unemployment rate was 10% in November 2009 compared to 9.9% in October and 8% in November a year ago. Compared with November 2008, unemployment went up by 4.978 million in the EU27 and by 3.041 million in the euro area.

Seasonally adjusted German exports in November increased 1.6% from October according to the Federal Statistics Office in Wiesbaden. German output in November increased 0.7% from October according to Economy Ministry in Berlin. Manufacturing output increased 0.9%.

UK producer prices index or wholesale annual inflation for all manufactured products rose 3.5% in December. Input price annual inflation rose by 6.9%. This mainly reflects price rises manufactured, electrical & food products and transport equipment.

In London FTSE 100 Index closed higher 7.52 or 0.14% to 5,534.24, in Paris CAC 40 Index increased 20.34 or 0.51% to close at 4,045.14, in Frankfurt DAX index higher 18.25 or 0.30% to close at 6,037.61. In Zurich trading SMI increased 62.52 or 0.95% to close at 6,617.88.

Gainers & Losers

Aeroports de Paris SA added 2.8% to €58.80 after the airports was upgraded to “buy” from “add” at Oddo Securities. Lufthansa increased 2.9% to €12.68 after passenger traffic increased 4.2% and global freight traffic increased 10.9% in November from a year ago according to Airport Council International in Geneva.

Beneteau SA advanced 5.2% to €12.10 after the sailboat-maker announced that it confirmed its revenue guidance for the fiscal year 2010. The company expects to report a 17% growth of its revenue.

Dassault Aviation SA increased 0.9% to €531 and yesterday it said that the company is facing difficulties in winning Brazilian fighter jet orders on high euro.

Groupe Pizzorno Environnement S.A the waste-management company climbed 7.4% to €20.85.

HeidelbergCement AG the cement maker rose 2.5% to €51.87.

Icade SA increased 1.9% to €71.88 after the real-estate company was upgraded to “buy” from “reduce” at Kepler Capital Markets.

Metro AG decreased 2.3% to €40.46, it fourth day decline in a row.

Praktiker Bau und Heimwerkermaerkte Holding AG the home-improvement retailer fell 1.4% to €6.97.

Societe Generale SA gained 1.1% to €51.89 after the bank will centralize its illiquid assets in a separate group to reduce operating risk, a company spokeswoman said Thursday.

Thales SA rose 1.7% to €34.42 after the defense-electronics maker was upgraded to “buy” from “neutral” at UBS AG.

ThyssenKrupp AG added 1.4% to €27.94 after the steelmaker ArcelorMittal increased heavy plate prices by €40 per ton for February delivery.

Veolia Environnement SA increased 4.2% to €25.17 after Goldman Sachs Group Inc. added the water company to its “conviction buy” list.

Volkswagen AG increased 1.1% to 66.46 and the company is looking to benefit from growing sales in India. The automaker is also looking to sell 400,000 in the U.S. in 2012 and cut prices of its mid-priced sedan Passat according to a report on Bloomberg that did not cite anyone.

DAX Index Movers

Beiersdorf AG led the decliners in the DAX index of 2.71%, followed by losses in Metro AG of 2.54%, in Henkel AG of 1.86%, in Fresenius SE of 1.48%, and in BMW AG of 1.34%.

Deutsche Lufthansa AG led gainers in the DAX index with a rise of 4.05% followed by increase in Deutsche Bank AG of 2.94%, in Infineon Technologies AG of 2.65%, in Deutsche Post AG of 2.40%, and in ThyssenKrupp AG of 1.70%.

CAC-40 Index Movers

Technip led the decliners in the CAC-40 index of 1.19%, followed by losses in Vivendi SA of 1.18%, in Schneider Electric SA of 0.90%, in Renault SA of 0.78%, and in Pernod Ricard SA of 0.76%.

Veolia Environnement gainers in the CAC-40 index with a rise of 3.91% followed by gainers in PPR SA of 3.18%, in BNP Paribas SA of 2.37%, in Electricité de France SA of 2.36%, and in Alstom SA of 1.96%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 57 increased, 43 declined and 2 were unchanged.

MAN Group Plc decliners in the FTSE 100 index with a loss of 2.32% followed by losses in London Stock Exchange Group Plc of 2.21%, in The Royal Bank of Scotland Group Plc of 2.09%, in Autonomy Corporation Plc of 2.01%, and in Kingfisher Plc of 1.83%.

Eurasian Natural Resources Corporation Plc led gainers in the FTSE 100 index with a rise of 5.19% followed by increase in Legal & General Group Plc of 3.06%, in Carnival Plc of 2.60%, in ICAP Plc of 2.56%, and in Kazakhmys Plc of 2.46%.