Indexes in Germany, France Fall 2%

Mayank Mehta
20 Jan, 2010
New York City

European indexes closed sharply lower on weak euro. Yields on Greek bonds increased and Greece plans to raise

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European indexes closed sharply lower on weak euro. Yields on Greek bonds increased and Greece plans to raise €53 billion of debt in the current year. Commodities declined after Chinese regulators look to trim lending by 22% this year. Accor SA quarterly revenues fell 7.2%.[/R]

European markets indexes traded sharply lower as Greek bonds fell and commodities declined after Chinese regulators plan to trim lending by 22%.

In London FTSE 100 Index closed lower 92.34 or 1.67% to 5,420.80, in Paris CAC 40 Index decreased 80.72 or 2.01% to close at 3,928.95, in Frankfurt DAX index lower 124.95 or 2.09% to close at 5,851.53. In Zurich trading SMI decreased 47.33 or 0.71% to close at 6,586.53.

Yields on 2-year Greek bonds increased 56 basis points to 4.23% and 10-year bonds surged 25 basis points to 6.17%. The ASE Index in Athens, Greece declined 3.4%. National Bank of Greece and EFG Eurobank Ergasias SA decline more than 5.5%.

Greece Finance Minister Papconstantinou said Greece plans to issue a total of €53 billion debt as €16 billion of debt mature in the second quarter.

International Monetary Fund chief Dominique Strauss-Kahn in an interview with Bloomberg Television said that Greek fiscal situation is “serious” but will not lead to “fragmentation of the euro zone.”

Earlier in the month in Washington at a presentation he also stressed that world investors still seek refuge in the U.S. dollar and the currency will remain as a reserve currency “at least” for a decade.

Gainers & Losers

Accor SA added 0.6% to €37.40 an international hotel operator said fourth quarter net revenues fell 7.2% to €1.81 billion from €1.95 billion a year ago. Total hotels revenues fell 9% to €1.30 billion from €1.43 billion a year ago. Prepaid services revenues fell 10% to €256.3 million from €285.4 million a year ago. Total other business hotels revenues rose 11% to €254.3 million from €228.9 million a year ago.

Alstom SA declined 1.4% to €52.00.

Audika SA closed unchanged at €36.25 after the provider of hearing correction consulting and solutions said fourth quarter net revenues rose 10.4% to €34.2 million from €31 million a year ago.

Deutsche Boerse AG the operator of the Frankfurt stock exchange dropped 1% to €54.46.

Electricite de Strasbourg SA added 1.8% to €42.18 after the power producer was upgraded to “outperform” from “neutral” at Exane BNP.

Groupe SEB SA the maker of countertop kitchen appliances increased 7.2% to €47.71.

Groupe Eurotunnel SA decreased 1.4% to €7.22 after the operator of the channel tunnel said fourth quarter revenues rose 10.6% to €142.6 million from €128.9 million a year ago. Eurotunnel Shuttles revenues rose 15.5% to €76.7 million from €66.4 million a year ago. Railways revenues rose 6.3% to €63.7 million from €59.9 million a year ago. Other revenues fell 15.4% to €2.2 million from €2.6 million a year ago.

MorphoSys AG gained 3.7% to €17.66 after the drugmaker and the chemical producer and Wacker Chemie AG announced an expansion of their existing cooperation in the use of WACKER''s bacterial secretion technology ESETEC.

Pfleiderer AG increased 5.1% to €7.36 after the laminate-flooring maker announced that its executive board has successfully completed the sale of all 2,643,458 of the company''s own shares held as treasury shares, constituting 4.96% of Pfleiderer''s share capital and raised €18.5 million.

Renault SA slipped 3.2% to €37.14 after the carmaker was downgraded to “sell” from “neutral” at UBS AG.

Steico AG the building insulation maker rose 0.8% to €9.48.

Technip SA climbed 1.4% to €52.71 after the oilfield-services provider was upgraded to “buy” from “neutral” at Bank of America.

Theolia SA the French wind- power producer rose 0.8% to €3.42.

ThyssenKrupp AG the steelmaker fell 1.2% to €26.70.

Vallourec SA slipped 1.7% to €129.45 after the maker of steel tubes for oil and gas production was downgraded to “underperform” from “neutral” at Bank of America.

Volkswagen AG the carmaker fell 0.04% to €72.81.

DAX Index Movers

K+S AG led the decliners in the DAX index of 4.92%, followed by losses in Diamler AG of 3.63%, in ThyssenKrupp AG of 3.63%, in Deutsche Post AG of 3.37%, and in Commerzbank AG of 3.32%.

Merck KGaA led gainers in the DAX index with a rise of 1.78% followed by increase in Fresenius SE of 0.61%.

CAC-40 Index Movers

Alstom SA led the decliners in the CAC-40 index of 4.21%, followed by losses in ArcelorMittal of 4.15%, in Renault SA of 3.85%, in Carrefour SA of 3.27%, and in Lafarge S.A. of 2.91%.

Electricite de Strasbourg SA gainers in the CAC-40 index with a rise of 1.58% followed by gainers in STMicroelectronics N.V. of 0.92%, in Cap Gemini SA of 0.52%, in Accor SA of 0.08%, and in EADS NV of 0.07%.