European Markets Drop 1%; Fiat, Ericsson Down

Mayank Mehta
25 Jan, 2010
New York City

European market indexes closed lower more than 1%, however Athens benchmark index surged. Greek government auction of

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European market indexes closed lower more than 1%, however Athens benchmark index surged. Greek government auction of €8 billion five-year bonds auction drew more than three times interests.[/R]

European markets were under pressure for the fourth day in a row. Traders focused on weaker than expected home sales in the U.S. and weak commodities prices.

In London FTSE 100 Index closed lower 42.68 or 0.80% to 5,260.31, in Paris CAC 40 Index decreased 38.93 or 1.02% to close at 3,781.85, in Frankfurt DAX index lower 63.95 or 1.12% to close at 5,631.37. In Zurich trading SMI decreased 42.66 or 0.66% to close at 6,451.30.

Greek government auction of €8 billion bonds received more than three times the bids. The bonds mature in 2015. The better than expected investors demand lifter Athens benchmark index 2.8%.

Gainers & Losers

Air Berlin Plc the airline dropped 4.1% to €4.13.

Credit Agricole SA gained 2.2% to €12.12 after the banking group reported that Societe Generale and company are in talks on creating an investment banking joint venture.

Deutsche Post AG fell 0.6% to €12.93.

Ericsson AB the consumer electronics maker said fourth quarter sales fell 13% to SEK58.3 billion from SEK67.0 billion a year ago. Net profit for the quarter fell 83% to SEK0.7 billion or SEK0.10 per diluted share compared to net profit of SEK4.1 billion or SEK 1.21 per share a year ago.

E.ON AG the utility decreased 0.4% to €27.41.

Fiat SpA decreased 1.1% to €9.80 after the manufacturer of automobiles, agricultural and construction equipment said fourth quarter sales rose 3.6% to €13.6 billion from €13.1 billion a year ago. Net loss for the quarter was €281 million or €0.23 per diluted share compared to net profit of €163 million or €0.13 per share a year ago.

Hermes International SCA added 3.2% to €98.50 after the maker of luxury handbags was upgraded to “neutral” from “underweight” at HSBC Holdings Plc.

Infineon Technologies AG the range of semiconductors added 2.4% to €3.81.

Kaufman & Broad SA advanced 6.7% to €17.29 after the stock was upgraded to ‘reduce’ versus ‘sell’ at Gilbert Dupont.

Kloeckner & Co SE added 1.4% to €17.91 after the steel traded announced that effective January 22 its Swiss subsidiary, Debrunner Koenig Holding AG, acquired the distributor Blaesi AG, in Berne.

Koninklijke Philips Electronics N.V. added 5.0% to €21.37 after the consumer-electronics maker said fourth quarter sales fell 4.7% to €7.26 billion from €7.62 billion a year ago. Net profit for the quarter was €251 million or €0.27 per diluted share compared to net loss of €1.17 billion or €1.26 per share a year ago.

OHB Technology AG declined 2.3% to €13.67.

Societe Generale SA climbed 2.0% to €43.30 after the bank was upgraded “buy” from “hold” at Deutsche Bank.

Siemens AG rose 1.4% to €65.59 and the company was selected as a preferred bidder for €6 billion train order from Deutsche Bahn AG.

SolarWorld AG rose 1.5% to €13.07 and the solar-energy company is donating solar modules to power 10 pump stations to provide clean, safe water for up to 175,000 earthquake survivors in Haiti.

Total SA fell 0.4% to €43.04.

Vranken-Pommery Monopole SA the maker of champagne slipped 2.7% to €30.50.

Volkswagen AG the automaker rose 0.1% to €69.62.

Wincor Nixdorf AG the maker of automated teller machines rose 3.0% to €48.42.

DAX Index Movers

Deutsche Lufthansa AG led the decliners in the DAX index of 2.57%, followed by losses in Commerzbank AG of 1.76%, in Fresenius Medical Care AG & Co. KGaA of 1.62%, in ThyssenKrupp AG of 1.51%, and in SalzgitterAG of 1.50%.

Infineon Technologies AG led gainers in the DAX index with a rise of 1.78%, followed by losses in Deutsche Bank AG of 1.50%, in Adidas AG of 1.45%, in BASF SE of 0.72%, and in Siemens AG of 0.56%.

CAC-40 Index Movers

Michelin SCA led the decliners in the CAC-40 index of 3.21%, followed by losses in Alcatel Lucent of 2.87%, in Cap Gemini SA of 2.42%, in PSA Peugeot Citroen S.A. of 2.40%, and in Compagnie de Saint-Gobain SA of 2.25%.

Societe Generale SA gainers in the CAC-40 index with a rise of 1.39% followed by gainers in Credit Agricole SA of 1.14%, in Accor SA of 0.04%, and in LVMH Moet Hennessy Louis Vuitton SA of 0.04%.