European Markets Down; Bwin, PartyGaming Talks

Mayank Mehta
22 Jan, 2010
New York City

European markets closed lower and now in the red for 2009. Investors worried that additional bank regulations and limits on risk ventures is likely to curb future profits at banks. Bwin Interactive is in merger talks with PartyGaming.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets closed lower and now in the red for 2009. Investors worried that additional bank regulations and limits on risk ventures is likely to curb future profits at banks. Bwin Interactive is in merger talks with PartyGaming.[/R]

European market indexes closed lower on the worries that Europe may follow the path of additional regulations to control banking activities. Current account deficit in the wider euro-zone area declined in the third quarter of 2009 and industrial new orders increased 1.6% in November.

EU27 external current account recorded a deficit of €27.7 billion in the third quarter of 2009, compared with a deficit of €73.5 billion in the third quarter of 2008 and a deficit of €49.0 billion in the second quarter of 2009.

Industrial new orders for EU16 area increased by 1.6% in November 2009, after an decrease of 1.9% in October and in EU27 new orders rose by 1.8% in November, after a fall of 1.4% in October.

Year-on-Year UK volume of retail sales in December rose 2.1%. Predominantly food stores sales increased 2.8%. The largest increase was textile, clothing and footwear stores at 4.7%. Total sales volume from October to December increased 2.7%.

In London FTSE 100 Index closed lower 32.11 or 0.60% to 5,302.99, in Paris CAC 40 Index decreased 41.38 or 1.07% to close at 3,820.78, in Frankfurt DAX index lower 51.65 or 0.90% to close at 5,695.32. In Zurich trading SMI decreased 84.99 or 1.29% to close at 6,493.96.

Gainers & Losers

Bwin Interactive Entertainment AG increased 3.5% to €48.50 after the Austria based online book maker confirmed that it is in “preliminary merger talks” with Gibraltar, UK based PartyGaming.

The online gambling industry is fragmented and European governments are looking to bring much of illegal gambling under the tax umbrella by relaxing rules.

Credit Agricole SA fell 1.7% to €11.97.

Continental AG rose 1.4% to €41.24 on the prospects of better sales in 2010 on an improved outlook for automobile production.

Electricite de Strasbourg SA slipped 0.3% to €41.44 after the power producer on sold $2.25 billion of debt in two parts according to a report by the IFR.

EADS NV decreased 0.9% to €14.27 and Reuters reported that Yemen''s national airline has signed a firm contract to buy ten A320 aircrafts that was valued at $700 million when announced two months ago at the time of Dubai Airshow.

ElringKlinger AG fell 1.5% to €17.24 on a broker lowered its rating.

Faurecia SA climbed 2.6% to €15.74 after the maker of automotive interiors was upgraded to “buy” from “neutral” at Goldman Sachs Group Inc.

Itelligence AG added 1.1% to €4.50 an information technology company said full-year revenues rose 1.6% to €220.0 million from €216.6 million a year ago. Accordingly, revenues for 2009 were within the forecasted range of between €220 million and €230 million. Earnings before interest and taxes fell 9.6% to €12.3 million from €13.6 million a year ago.

Kaufman & Broad SA advanced 2.0% to €17.16 after the property developer and builder said fourth quarter sales fell 9.6% to €274.7 million from €303.8 million a year ago. Net loss for the quarter was €2.8 million compared to net loss of €0.5 million a year ago.

LVL Medical Group the medical equipment supplier rose 1.1% to €16.95.

Pierre & Vacances SA climbed 3.3% to €53.80 after the provider of ski accommodation said first quarter sales rose 10.7% to €329.3 million from €297.4 million a year ago. Tourism sales fell 4.8% to €207.3 million from €217.7 million a year ago. Accommodation turnover fell 3.5% to €106.7 million from €110.5 million a year ago.

PSA Peugeot Citroen S.A rose 0.4% to €25.10.

Schneider Electric SA added 0.4% to €77.32 after the electrical engineering company upgraded to “overweight” from “neutral” at HSBC Holdings Plc.

Sony Ericsson Mobile Communications AB said fourth quarter sales increased 4% to €1.75 billion from €1.62 billion a year ago. Net loss for the quarter was €167 million compared to net loss of €187 million a year ago.

ST-Ericsson the global independent semiconductor company said fourth quarter sales rose 0.8% to $740 million from $746 million a year ago. Net loss for the quarter was $125 million compared to net loss of $112 million a year ago.

Volkswagen AG fell 0.6% to €70.68.

DAX Index Movers

Deutsche Lufthansa AG led the decliners in the DAX index of 6.06%, followed by losses in Deutsche Bank AG of 4.42%, in Deutsche Boerse AG of 3.21%, in ThyssenKrupp AG of 3.03%, and in Infineon Technologies AG of 2.69%.

Bayer AG led gainers in the DAX index with a rise of 1.18%, followed by losses in Muenchener Rue AG of 0.97%, in K+S AG of 0.90%, in Fresenius Medical Care AG & Co. KGaA of 0.65%, and in SalzgitterAG of 0.64%.

CAC-40 Index Movers

Societe Generale SA led the decliners in the CAC-40 index of 5.20%, followed by losses in Credit Agricole SA of 2.51%, in AXA of 2.50%, in Technip of 2.49%, and in STMicroelectronics N.V. of 2.40%.

Alcatel Lucent gainers in the CAC-40 index with a rise of 1.06% followed by gainers in Alstom SA of 1.00%, in Carrefour SA of 0.41%, in ArcelorMittal of 0.38%, and in Vivendi SA of 0.30%.