Greece Worries Cloud Euro Sentiment

123jump.com Staff
14 Jan, 2010
New York City

European bonds and currencies markets were rattled as the pressure builds on Greece to trim its budget deficit soon. The ECB President and German Chancellor comments added more pressure on Greek lawmakers to trim budget deficit to 8.7% from the current 12.7%. The euro declined against the dollar.

[R]7:00 PM Frankfurt – European bonds and currencies markets were rattled as the pressure builds on Greece to trim its budget deficit soon. The ECB President and German Chancellor comments added more pressure on Greek lawmakers to trim budget deficit to 8.7% from the current 12.7%. The euro declined against most currencies.[/R]

Bond investors focused on the health of the euro and EU regulators and political leaders are expected to handle Greece crisis.

The ECB left its key lending rate unchanged at 1% for the euro area and indicated that rates will remain low for the most part of 2010. The rate was last lowered in May.

The ECB President Jean-Claude Trichet clarified today that central bank is not prepared to offer any special treatment to Greece. German Chancellor Angela Merkel cautioned that ongoing Greek financial crisis could have consequences for the euro.

The statements spook currency and bond markets. The yield on 2-year German bunds rose 38 basis points to 3.44% and the euro declined to $1.448 from $1.4500.

Prime Minister of Greece George Papandreou wowed control budget deficit and meet the target set by the EU regulators. Greece is expected to cut its budget deficit last year from 12.7% of GDP to 8.7% by the year end.

Output in 16-nations euro zone increased 1.0% in November from previous month and dropped 7.1% from a year ago.

In London FTSE 100 Index closed higher 24.72 or 0.45% to 5,498.20, in Paris CAC 40 Index increased 14.91 or 0.37% to close at 4,015.77, in Frankfurt DAX index higher 25.74 or 0.43% to close at 5,988.88. In Zurich trading SMI increased 72.87 or 1.11% to close at 6,627.42.

Europe Movers

Aurubis AG increased 3.6% to 33.81 euros as new power grid is expected to be built to connect the wind farm in the North and Irish seas.

Camaieu increased 4.2% to 148 euros after the women’s apparel retailer 7% to 765.3 million euros. The company plans to open 100 stores in 2010.

Carrefour SA decreased 1.9% to 34.23 euros and after close retailer said fourth quarter sales were 26 billion euros.

Daimler AG increased 2.5% to 37.10 euros after Frankfurter Allgemeine Zeitung said the company is adding short term staff to meet additional demand for luxury cars from China.

HeidelbergCement AG increased 1% to 51.40 euros after it completed the sale of 1.4 billion euros bonds to replace bank credit facility. The rating agency S&P revised its debt view one level higher.

Riber SA decreased 3.5% to 1.38 euros after 2009 sales declined nearly 10% to 17.3 million euros.

SAP AG increased 1.9% to 35.35 euros after full year sales fell 3.2% to 8.19 billion euros and excluding Business Objects SA acquisition and adjusting for currency variations sales declined 5%. The results were better than management expectations in October.

Sales in the fourth quarter declined 16% to 1.11 billion euros and total sales declined 8.9% to 3.18 billion euros.

United Internet AG increased 4% to 10.35 euros after it said that plans to buy back 2.1% of its outstanding shares or 5 million shares.

Ubisoft Entertainment declined 5.6% to 9.51 euros after the video game maker said it estimates full year operating loss after the sales of games related to Nintendo devices plunged 50%.

Vet’Affaires surged 6% to 15.80 euros after the discount apparel retailer said revenues increased slightly 92.7 million euros.

DAX Index Movers

Deutsche Boerse AG led the decliners in the DAX index of 2.41%, followed by losses in MAN SE of 1.83%, in Allianz SE of 1.32%, in Deutsche Post AG of 1.23%, and in Metro AG of 1.20%.

Fresenius SE led gainers in the DAX index with a rise of 2.31% followed by increase in Henkel AG of 2.30%, in Diamler AG of 2.14%, in Adidas AG of 1.70%, and in SAP AG of 1.61%.

CAC-40 Index Movers

GDF Suez SA led the decliners in the CAC-40 index of 2.53%, followed by losses in Electricite de Strasbourg SA of 1.32%, in Carrefour SA of 0.80%, in Air Liquide SA of 0.79%, and in Unibail-Rodamco SA of 0.74%.

Michelin SCA gainers in the CAC-40 index with a rise of 4.34% followed by gainers in Lagardere SCA of 3.52%, in Cap Gemini SA.of 2.57%, in Vallourec SA of 2.47%, and in ArcelorMittal of 2.46%.