European Commission Voted In; Euro Rises

Mayank Mehta
09 Feb, 2010
New York City

European markets inched higher as optimism grew that the euro zone leader will offer a bailout plan for Greece. The European Parliament approved the new European Commission in a vote today. The euro advanced. The Swatch Group surged 5% after it indicated better results in the current year.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets inched higher as optimism grew that the euro zone leader will offer a bailout plan for Greece. The European Parliament approved the new European Commission in a vote today. The euro advanced. The Swatch Group surged 5% after it indicated better results in the current year.[/R]

European markets closed higher as investors increasingly view that a regional bailout will be presented soon by political leaders and the European Central Bank.

The euro gained 1% against the dollar $1.3586 and 0.8% to123.61 yen as investors grow more confident.

In London FTSE 100 Index closed higher 19.51 or 0.38% to 5,111.84, in Paris CAC 40 Index increased 5.49 or 0.15% to close at 3,612.76, in Frankfurt DAX index higher 13.41 or 0.24% to close at 5,498.26. In Zurich trading SMI decreased 32.39 or 0.51% to close at 6,314.75.

Greek 10-year bonds yields increased 36 basis points to 6.4%.

European Commission Vote

The European Parliament today voted formally after months of delays and reappointments a new European Commission into power.

By 488 votes to 137 and with 72 members abstaining, the parliament approved the commission and endorsed for the second term of five years as its president Jose Manuel Barroso.

Before the vote, Barosso conceded in a speech that the euro and euro zone are undergoing “difficult” period and worries of financial contagion involving Greece, Spain and Portugal are challenges that the region is facing. But he stressed that the euro zone has “the capacity to deal with the difficulties.”

Gainers & Losers

Aurubis AG advanced 1.3% to €30.29 after the refiner was upgraded to “buy” from “sell” at DZ Bank AG.

Cap Gemini SA decreased 0.2% to €31.14 after the computer-services company, Sogeti High Tech, a unit of the company received a three-year contract to supply IT services to Airbus for structural calculations, according to Dow Jones report.

Centrotherm Photovoltaics AG gained 8.2% to €39.24 after the maker of equipment to produce solar silicon and modules was upgraded to “buy” from “hold” at Citigroup Inc.

Renault SA the manufacture of automobiles and related services added 2.2% to €33.38 and the company is also reviewing its joint venture in India with Mahindra & Mahindra Ltd.

Swedbank AB the bank said fourth quarter net interest income fell 18% to SEK4.7 billion from SEK5.7 billion a year ago. Net loss for the quarter was SEK1.80 billion or SEK1.83 per diluted share compared to net profit of SEK1.92 billion or SEK2.90 per share a year ago.

SAS AB the Scandinavian airline said fourth quarter revenues fell 19% to SEK10.32 billion from SEK12.82 billion a year ago. Net loss for the quarter was SEK1.30 billion or SEK0.53 per diluted share compared to net loss of SEK2.79 billion or SEK2.77 per share a year ago.

Tele2 AB the telecommunications operator said fourth quarter revenues fell 1% to SEK9.89 billion from SEK9.99 billion a year ago. Net profit for the quarter rose 17% to SEK1.05 billion or SEK2.36 per diluted share compared to net profit of SEK894 million or SEK2.03 per share a year ago.

The Swatch Group AG surged as much as 6% after it reported net income in 2009 declined Sfr 759 million. The company also guided higher sales and earnings in the current year. The watch maker’s 18 brands gained market share in 2009.

For the full-year sales fell 9.5% to CHF5.14 billion from CHF5.68 billion a year ago. Net profit declined 9% to CHF759 million compared to net profit of CHF834 million a year ago.

TUI AG dropped 0.2% to €6.63 after the travel company was downgraded to “hold” from “buy” at Equinet AG.

UBS AG the bank said fourth quarter net interest income rose 5% to CHF1.75 billion from CHF1.66 billion a year ago. Net profit for the quarter was CHF1.21 billion or CHF0.31 per diluted share compared to net loss of CHF9.56 billion or CHF0.01 per share a year ago.

Unibail-Rodamco SA the shopping-center owner fell 3.8% to €148.10.

Vallourec SA rose 3.2% to €3.22 after the maker of steel tubes for oil and gas production was upgraded to “overweight” from “neutral” at JPMorgan Chase & Co.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 1.81%, followed by losses in Fresenius SE of 1.06%, in SAP AG of 0.55%, in Fresenius Medical Care AG & Co. KGaA of 0.41%, and in Deutsche Post AG of 0.33%.

Deutsche Bank AG led gainers in the DAX index with a rise of 4.42%, followed by losses in K+S AG of 2.67%, in MAN SE of 2.51%, in ThyssenKrupp AG of 2.15%, and in Commerzbank AG of 2.11%.

CAC-40 Index Movers

Unibail-Rodamco SA led the decliners in the CAC-40 index of 6.04%, followed by losses in STMicroelectronics N.V. of 1.54%, in EADS NV of 1.46%, in Pernod Ricard SA of 0.98% and in TOTAL S.A. of 0.88%.

Vallourec SA gainers in the CAC-40 index with a rise of 2.65%, followed by gainers in Technip of 2.42%, in Compagnie de Saint-Gobain SA of 2.39%, in ArcelorMittal of 2.11% and in Renault SA of 2.05%.