Fourth Weekly Decline in European Indexes

Mayank Mehta
05 Feb, 2010
New York City

European markets declined for the fourth week in a row and the indexes in Spain, Portugal and Greece dropped near one-year low. Gross domestic product in Spain declined 0.1% in the fourth quarter to December. Hermes reported 8.6% sales increase and a higher net. LVMH net declined 13%.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets declined for the fourth week in a row and the indexes in Spain, Portugal and Greece dropped near one-year low. Gross domestic product in Spain declined 0.1% in the fourth quarter to December. Hermes reported 8.6% sales increase and a higher net. LVMH net declined 13%.[/R]

European markets closed sharply lower for the fourth quarter in a row as investors fear Spain, Portugal and Greece will face difficult time in lowering their budget deficit and hamper the economic recovery.

The Euro traded lower against the dollar and the yen.

Credit default swaps on the sovereign debt of Spain increased 13 basis points to 183, Portugal added 9.5 basis points to 239 and Greece soared 19.5 basis points to 446.5 according to CMA DataVision.

Bank of Spain in its monthly bulletin estimated economy contracted in the last quarter to December by 0.1% and fell 3.1% from a year ago quarter. Separately, National Statistics Institute said industrial production decreased 1.4% from a year ago in December.

In London FTSE 100 Index closed lower 78.39 or 1.53% to 5,060.92, in Paris CAC 40 Index decreased 125.49 or 3.40% to close at 3,563.76, in Frankfurt DAX index lower 98.90 or 1.79% to close at 5,434.34. In Zurich trading SMI decreased 132.18 or 2.07% to close at 6,264.33.

The benchmark indexes in Spain declined 1.4% and recovered from the 3.2% decline, in Portugal fell 1.4% and in Greece dropped 3.7%.

Gainers & Losers

Azimut Holding SpA dropped 8.7% to €8.23.

BNP Paribas SA fell 3.4% to €48.11.

Bureau Veritas SA rose 1.2% to €35.24.

Daimler AG fell 2.2% to €32.36 after the maker of luxury cars was upgraded to “buy” from “hold” at Royal Bank of Scotland Group Plc.

Hermes International SCA decreased 1.1% to €95.99 after the luxury goods retailer said fourth quarter sales rose 8.6% to €587.3 million from €540.9 million a year ago. Europe sales rose 8.5% to €240.1 million from €221.3 million a year ago. Total Asia sales rose 9.8% to €244.8 million from €223 million a year ago.

Julius Baer Gruppe AG the bank said full-year net interest income rose 2.7% to CHF466.5 million from CHF454.4 million a year ago. Net profit for the full-year rose 9% to CHF388.7 million or CHF1.88 per diluted share compared to net profit of CHF356.9 million or CHF1.70 per share a year ago.

Krones AG fell 2.6% to €36.27 after the maker of bottling and packaging equipment was downgraded to “sell” from “neutral” at UBS AG.

LVMH Moet Hennessy Louis Vuitton SA fell 3.4% to €75.21 after the luxury goods company said full-year revenues fell 0.8% to €17.05 billion from €17.19 billion a year ago. Net profit declined 13% to €1.76 billion compared to net profit of €2.03 billion a year ago.

Renault SA decreased 4.3% to €32.29 after the company was downgraded to “hold” from “buy” at RBS.

Software AG rose 0.3% to €79.09 after the software maker was upgraded to “hold” from “sell” at Societe Generale SA.

Syngenta AG an agri-business company said full-year sales fell 5% to $11.0 billion from $11.6 billion a year ago. Net profit for the full-year fell 1% to $1.37 billion or $14.62 per diluted share compared to net profit of $1.38 billion or $14.63 per share a year ago.

Teleperformance SA the operator of call centers fell 2.6% to €23.83.

Total SA dropped 2.3% to €40.60 after OAO Novatek and the company has created a joint venture for exploration and development of the Termokarstovoye gas condensate field in the Yamal-Nenets Autonomous Region, according to Dow Jones.

AB Volvo increased 2.2% to SEK66.05 after the truckmaker said fourth quarter revenues rose 18% to SEK59.8 billion from SEK78 billion a year ago. Net loss for the quarter was SEK2.0 billion or SEK0.99 per diluted share compared to net loss of SEK1.36 billion or SEK0.67 per share a year ago.

DAX Index Movers

Infineon Technologies AG led the decliners in the DAX index of 3.51%, followed by losses in Bayer AG of 2.93%, in Deutsche Boerse AG of 2.42%, in Deutsche Post AG of 2.33%, and in ThyssenKrupp AG of 2.33%.

Henkel AG led gainers in the DAX index with a rise of 0.16%.

CAC-40 Index Movers

AXA led the decliners in the CAC-40 index of 6.05%, followed by losses in BNP Paribas SA of 5.49%, in Compagnie de Saint-Gobain SA of 5.18%, in Credit Agricole SA of 5.08% and in Dexia SA of 5.03%.

Suez Environnement SA gainers in the CAC-40 index with a rise of 0.06%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 8 increased, 94 declined and none were unchanged.

ICAP Plc decliners in the FTSE 100 index with a loss of 19.47% followed by losses in Lloyds Banking Group Plc of 5.73%, in Xstrata Plc of 5.19%, in Invensys Plc of 5.13%, and in 3i Group Plc of 4.34%.

Compass Group Plc led gainers in the FTSE 100 index with a rise of 5.19% followed by increase in BAE Systems Plc of 1.59%, in Liberty International Plc of 0.97%, in Johnson Matthey Plc of 0.67%, and in Kazakhmys Plc of 0.67%.