Greece Lowers GDP Estimate; Thyssen Profit

Mayank Mehta
12 Feb, 2010
New York City

European markets declined after China increased bank reserve and investors await details of Greek bailout. Separately, Greece lowered its estimate of GDP in the first three quarters of 2009. Michelin earnings deflate on lower tire sales. ThyssenKrupp AG posts first profit in a year.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets declined after China increased bank reserve ratio and investors await specifics of Greek bailout. Separately, Greece lowered its estimate of gross domestic product in the first three quarters of 2009. Michelin earnings deflate on lower tire sales. ThyssenKrupp AG posts first profit in year on rising demand and lower costs.[/R]

The European leaders issued more statements to calm investors and support Greece. However, the lack of details is unnerving the markets. Markets are expecting clear direction from political leaders which is not expected for another week.

German Chancellor Angela Merkel, other leaders in the region and the EU president said they are working on a bilateral action that may provide direct lending to Greece under tough pre-conditions.

The euro declined as much as 1.2% but recovered to close down at $1.365 in Frankfurt trading and the 2-year German bond yield declined 3 basis points to 1.01%. The euro has declined 7.4% in the year so far.

The euro area and in the wider EU27 zone GDP in the fourth quarter increased 0.1% from third quarter 2009. Seasonally adjusted GDP compared to the quarter a year ago decreased 2.1% in the euro area and 2.3% in the EU27 in the fourth quarter of 2009.

For the year 2009, the gross domestic product in the region declined 4%.

Industrial output in 16-nations euro zone decreased 1.7% in December from the previous month and dropped 5.0% from a year ago.

In London FTSE 100 Index closed lower 19.03 or 0.37% to 5,142.45, in Paris CAC 40 Index decreased 17.68 or 0.49% to close at 3,599.07, in Frankfurt DAX index lower 3.54 or 0.06% to close at 5,500.39. In Zurich trading SMI increased 12.78 or 0.20% to close at 6,416.20.

The ASE Index declined 2.1% after nation’s statistics services revised downwards it gross product estimate lower for the first three quarters of 2009.

The statistics institute revised GDP in the first quarter to 1% shrink compared to previous estimate of 0.5% decline, in the second quarter fell 0.3% compared to 0.1% and in the third quarter shrank 0.5% compared to 0.4%.

Gainers & Losers

Air France-KLM decreased 0.1% to €10.22 after the airline was upgraded to “hold” from “sell” at Citigroup Inc.

Alcatel Lucent SA added 1.0% to €2.09 after the supplier of fixed-line phone networks was upgraded the stock to “buy” from “hold” at Royal Bank of Scotland Group Plc.

BNP Paribas SA dropped 1.0% to €47.97 after the bank was downgraded to “hold” from “buy” at Deutsche Bank AG.

Compagnie de Saint-Gobain SA fell 0.2% to €32.44 after the building materials supplier was downgraded to “underweight” from “equal weight” at Morgan Stanley.

Electricite de Strasbourg SA rose 1.7% to €39.28 after the company announced that together with Delta, a Dutch power company; it has inaugurated an 870 megawatt gas combined cycle power station at Vlissingen-Oost, in the south-west of the Netherlands.

Eni SpA rose 2.1% to €16.83 an oil company said fourth quarter revenues fell 9.6% to €22.19 billion from €24.55 billion a year ago. Net profit for the quarter was €641 million or €0.18 per diluted share compared to net loss of €874 million or €0.24 per share a year ago.

Linedata Services SA the software company rose 0.1% to €9.46.

Metropole Television SA added 1.9% to €18.99 after the television company reported a better-than-expected annual net income and said it''s paying one time dividend after strong earnings and cash position according to Dow Jones news service.

Michelin SCA fell 1.6% to €51.18 after the manufacturer of tires said full-year revenues fell 9.8% to €14.8 billion from €16.4 billion a year ago. Net profit for the full-year fell 71% to €104 million compared to net profit of €357 million a year ago.

Nexans SA fell 1.4% to €56.25 after the maker of cables and wires was downgraded to “neutral” from “buy” at Bank of America Merrill Lynch Global Research.

Rougier SA the wood-paneling maker gained 2.4% to €20.48.

SES SA increased 3.5% to €16.50 after it reported 2009 net income increased 23% to €476.5 million and increased its dividend 11% to 73 euro cents.

ThyssenKrupp AG rose 3.9% to €23.21 after the steelmaker said first quarter sales fell 19% to €9.35 billion from €11.52 billion a year ago. Net profit for the quarter fell 2.4% to €164 million or €0.36 per diluted share compared to net profit of €168 million or €0.35 per share a year ago.

DAX Index Movers

Infineon Technologies AG led the decliners in the DAX index of 3.11%, followed by losses in Volkswagen AG of 3.09%, in Deutsche Post AG of 2.90%, in Deutsche Bank AG of 2.37%, and in MAN SE of 2.30%.

ThyssenKrupp AG led gainers in the DAX index with a rise of 2.04%, followed by losses in Beiersdorf AG of 1.31%, in Bayer AG of 1.06%, in Deutsche Boerse AG of 1.00%, and in Merck KGaA of 0.97%.

CAC-40 Index Movers

Renault SA led the decliners in the CAC-40 index of 4.66%, followed by losses in PSA Peugeot Citroen S.A. of 4.07%, in Compagnie de Saint-Gobain SA .of 3.60%, in Dexia SA of 3.37% and in Bouygues SA of 3.22%.

Essilor International SA gainers in the CAC-40 index with a rise of 1.78%, followed by gainers in Electricite de Strasbourg SA of 1.11%, in L''Oreal SA of 0.95%, in Sanofi-Aventis of 0.93% and in Danone SA of 0.93%.