European Indexes Volatile, Slower Growth

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

World indexes traded mixed after China reported a surge in its latest quarterly economic expansion. European composite index of manufacturing and services showed a slower growth in January. The euro declined 0.4% and Greek bonds rebounded.

[R]9:00 AM New York, 3:00 PM Frankfurt – World indexes traded mixed after China reported a surge in its latest quarterly economic expansion. European composite index of manufacturing and services showed a slower growth in January. The euro declined 0.4% and Greek bonds rebounded.[/R]

European markets traded volatile with the euro bouncing around its two-month low and Greek bonds rallying. A private measure of economic expansion indicated slower than expected growth.

A composite index of manufacturing and service industry as measured by Markit Economics declined to 53.6 in January from 54.2 in December. A read above indicates an expansion. Service index declined more than expected to 52.3 from 53.6 in December and manufacturing index increased to 52 from 51.6.

The euro declined as much as 0.45% to $1.4054 and bounced back to $1.407 after the release of the report.

Greek bonds rebounded after finance minister Papconstantinou said that the country does not need emergency funding from other member nation in the union. He added that the government is scheduled to raise 50% of its financing need in the second quarter of this year and yields on the bonds will decline as time passes.

The 10-year Greek bond yields declined 6 points to 6.12% after surging to a record high 6.25%. Yield spreads to German bonds increased to 301 basis points.

The Greece based Public Debt Management Agency said that the country is expected to raise 54 billion euros compared to 67 billion euros in 2009 and most of its debt requirement is roll over the debts maturing in the second quarter.

In the fourth quarter, Chinese economy expanded at 10.7% compared to a year ago and in 2009 the economy grew at 8.7%, above the target rate of 8% set by the government. China also revised its third quarter expansion to 9.1% from the previous estimate of 8.9% and first quarter at 6.2% from 6.1%.

Fixed investment in urban areas soared 30.5% in 2009 according to the Chinese statistics agency. Industrial production increased in December at 18.5% and retail sales surged at 17.5% according to a separate report issued by the agency.

Europe Markets Review

In London FTSE 100 Index traded lower 3.91 or 0.07% to 5,416.89, in Paris CAC 40 Index increased 9.10 or 0.23% to 3,938.05 and in Frankfurt DAX index traded higher 8.72 or 0.15% to 5,860.25. In Zurich trading SMI increased 21.13 or 0.32% to 6,607.66.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 130.89 or 1.22% to 10,868.41, and Hang Seng index in Hong Kong decreased 423.50 or 1.99% to 20,862.67, and CSI 300 index in China higher 14.14 or 0.42% to 3,408.57. ASX 200 index in Australia decreased 41.00 or 0.84% to 4,827.20. The FTSE Bursa KL Composite index in Malaysia was higher 1.74 or 0.13% to 1,308.36.

The Kospi Index in South Korea increased 7.63 or 0.45% to close at 1,722.01. SET index in Thailand closed lower 12.81 or 1.75% to 718.99. JSE Index in Indonesia decreased 28.88 or 1.08% to 2,638.38. The Sensex index in India decreased 423.35 or 2.42% to 17,051.14.