Spain Leads Euro Zone Drop with 6% Plunge

Mayank Mehta
04 Feb, 2010
New York City

European Central Bank left its key lending rate at 1% and also hoped that the decision needed to reach 3% deficit target set for Greece will be followed. Market indexes in every member nation in the euro zone declined between 2% and 6%. Banco Santander plunged 9%.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European Central Bank left its key lending rate at 1% and also hoped that the decision needed to reach 3% deficit target set for Greece will be followed. Market indexes in every member nation in the euro zone declined between 2% and 6%. Banco Santander plunged 9%.[/R]

European Central Bank left its key lending rate unchanged at 1% and the euro declined after investors sold bank stocks in Portugal, Spain, Greece and Hungary.

President Trichet at a press conference after the decision said that price pressures in the region “subdued” and the outlook for the region’s economic recovery remain “uneven” and grow at a “moderate” pace. Inflation expectations are expected to below 2% in the medium term.

The benchmark indexes across every member nation in euro zone declined. Spain led the decliners with a loss of 6% followed by losses of 4.8% in Portugal and 3.3% in Greece.

In London FTSE 100 Index closed lower 113.84 or 2.17% to 5,139.31, in Paris CAC 40 Index decreased 104.22 or 2.75% to close at 3,689.25, in Frankfurt DAX index lower 138.85 or 2.45% to close at 5,533.24. In Zurich trading SMI decreased 157.29 or 2.40% to close at 6,396.51.

Spain completed its 2.5 billion 3-year bond offering that yielded 2.63%, compared to 2.14% yield on the bonds sold on December 3.

Gainers & Losers

Access Commerce SA the software developer plunged 9.0% to €0.70.

Banco Santander, S.A plunged 9.4% and its fourth quarter net interest income rose 29% to €6.82 billion from €5.27 billion a year ago. Net profit for the quarter rose 13% to €2.2 billion or €0.25 per diluted share compared to net profit of €1.9 billion or €0.25 per share a year ago.

Bonduelle SCA fell 3.2% to €82.30 after the producer of canned vegetables announced that it has finalized the agreement for the acquisition of France Champignon from the investment fund company Butler Capital Partners.

CGG Veritas dropped 4.0% to €18.49 after the seismic surveyor was downgraded to “neutral” from “overweight” at JPMorgan Chase & Co.

Deutsche Bank AG fell 1.0% to €45.38 after the bank said fourth quarter net profit was €1.3 billion or €2.00 per diluted share compared to net loss of €4.8 million or €8.71 per share a year ago.

Faurecia SA rose 1.4% to €15.85 after the maker of automotive interiors said Wednesday it has agreed to buy the Plastal’ German business to be the largest maker of external auto product. The news was first reported by Dow Jones.

Groupe Partouche SA dropped 7.6% to €2.64 after the casino operator was downgraded to “sell” versus “add” at Gilbert Dupont and to “reduce” versus “buy” at Natixis.

Lafarge S.A fell 0.6% to €53.57 after the company and Votorantim Celulose e Papel SA agreed to acquire 17.3% in CIMPOR - Cimentos de Portugal SGPS SA.

SMA Solar Technology AG dropped 5.5% to €82.06 said that its chief financial officer Pierre-Pascal Urbon is under preliminary investigation in a private matter. Mr. Urbon denies the accusations.

Soft Computing SA plunged 9.7% to €3.34 after the maker of customer relationship management software announced that it has acquired 156,859 of its own shares on January 8. The Company now owns a total of 165,522 shares, representing 5.6% of its capital.

Software AG fell 3.0% to €81.29 after the software maker said full-year revenues rose 18% to €847.4 million from €720.6 million a year ago. Net profit for the full-year rose 22% to €140.8 million or €4.92 per diluted share compared to net profit of €115.9 million or €4.05 per share a year ago.

Zurich Financial Services AG fell 1.3% to €21.90 after the insurer said full-year revenues rose 118% to $70.3 billion from $32.3 billion a year ago. Net profit rose 6.7% to $3.2 billion or $22.35 a diluted share compared to net profit of $3.0 billion or $21.63 per share a year ago.

DAX Index Movers

Commerzbank AG led the decliners in the DAX index of 5.46%, followed by losses in ThyssenKrupp AG of 5.16%, in Deutsche Bank AG of 4.84%, in BASF SE of 4.53%, and in Diamler AG of 4.48%.

There were no gainers in the DAX Index Movers.

CAC-40 Index Movers

Societe Generale SA led the decliners in the CAC-40 index of 5.79%, followed by losses in Credit Agricole SA of 5.17%, in BNP Paribas SA of 5.14%, in Renault SA of 4.52% and in PSA Peugeot Citroen S.A. of 4.45%.

There were no gainers in the CAC-40 Index Movers.