European Markets Jump; L'Oreal, Technip Rise

Mayank Mehta
16 Feb, 2010
New York City

European market indexes closed higher on the rising sentiment and commodities prices. Greek bond yields spreads to German bonds widened. Imerys SA profits take a hit. L''Oreal SA fall 3.7% after fourth quarter sales miss forecasts. Clariant AG annual loss widened.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European market indexes closed higher on the rising sentiment and commodities prices. Greek bond yields spreads to German bonds widened. Imerys SA profits take a hit. L''Oreal SA fall 3.7% after fourth quarter sales miss forecasts. Clariant AG annual loss widened.[/R]

European markets closed higher and commodities and the euro edged up as well. Investors showed higher risk appetite across the region after Barclays reported better than expected earnings and Greece said it does not need a bailout.

In London FTSE 100 Index closed higher 76.59 or 1.48% to 5,244.06, in Paris CAC 40 Index increased 59.82 or 1.66% to close at 3,669.04, in Frankfurt DAX index higher 81.02 or 1.47% to close at 5,592.12. In Zurich trading SMI increased 56.90 or 0.88% to close at 6,497.66.

The European finance ministers suggested a tough line for Greece ahead of March 16 review. The ministers may demand higher taxes on luxury goods, increase in value added taxes and slow down the capital spending to reduce the record budget deficit of 12.7%.

Greek bond yields spreads to the German bonds increased to 320 basis points from 305 basis points yesterday. Investors are skeptical that Greece will be able to trim its deficit in the timetable set by the EU regulators.

Greek Finance Minister George Papaconstatinou after a meeting in Brussels said that January budget surplus was €574 million compared to a deficit of €1.55 billion a year ago. In addition, he stressed that Greece has not asked for a bailout from other countries.

Gainers & Losers

Air Liquide SA advanced 1.5% to €81.16 and the industrial-gas producer was downgraded to “sell” from “hold” at Standard & Poor’s Equity Research.

Beni Stabili SpA dropped 0.5% to €0.60 after the real estate company said full-year net rental income was flat at €196.7 million. Net loss for the full-year was €51.5 million compared to net profit of €36.8 million a year ago.

Clariant AG the chemicals producer said full-year sales fell 18% to CHF6.61 billion from CHF8.07 billion a year ago. Net loss for the full-year was CHF194 million or CHF0.91 per diluted share compared to net loss of CHF37 million or CHF0.20 per share a year ago.

Deutsche Bank AG rose 3.4% to €45.67 after Credit Suisse raises recommended the stock.

Fastweb SpA climbed 1.2% to €17.20 after the broadband Internet connectivity provider said full-year sales rose 8% to €1.85 billion from €1.71 billion a year ago. Net loss for the full-year was €35.6 million compared to net profit of €1.1 million a year ago.

Givaudan SA the fragrance and flavor industry said full-year sales fell 3% to CHF3.96 billion from CHF4.09 billion a year ago. Net profit for the full-year rose 79% to CHF199 million or CHF24.97 per diluted share compared to net profit of CHF111 million or CHF14.87 per share a year ago.

Imerys SA added 2.0% to €38.72 after the minerals processor said full-year sales fell 20% to €2.77 billion from €3.45 billion a year ago. Net profit for the full-year fell 74% to €41.3 million or €0.57 per diluted share compared to net profit of €161.3 million or €2.39 per share a year ago.

K+S AG the agro-chemical producer rose 1.4% to €44.29.

L''Oreal SA rose 0.5% to €20.83 after the cosmetics company said full-year sales fell 0.4% to €17.47 billion from €17.54 billion a year ago. Net profit for the full-year fell 8% to €1.79 billion or €3.07 per diluted share compared to net profit of €1.95 billion or €3.30 per share a year ago.

Orpea SA increased 1.5% to €29.43 after the commercial retirement-home operator was upgraded to “neutral” from “sell” at Goldman Sachs Group Inc.

Technip SA rose 1.1% to €53.00 after the oilfield-services provider was upgraded to “hold” from “sell” at Citigroup Inc.

Total SA climbed 0.7% to €42.03 after the oil company was downgraded to “market perform” from “outperform” at Sanford C. Bernstein & Co.

TUI AG gained 3.6% to €7.20 after the tourism sector was upgraded to “reduce” from “sell” at BHF-Bank AG.

Umanis SA the computer consulting company fell 4.6% to €0.62.

Unibail-Rodamco SA climbed 0.1% to €144.05 after the shopping-center owner agrees to sell five shopping centers to Wereldhave NV for €235 million.

Volkswagen AG rose 0.8% to €63.12 after the carmaker was upgraded to “buy” from “sell” at Redburn Partners LLP.

DAX Index Movers

Henkel AG led the decliners in the DAX index of 0.86%, followed by losses in METRO AG of 0.76%, in Deutsche Lufthansa AG of 0.18%.

MAN SE led gainers in the DAX index with a rise of 3.89%, followed by increase in Deutsche Bank AG of 3.48%, in Infineon Technologies AG of 2.58%, in Thyssenkrupp AG of 2.34%, and in BMW AG of 2.28%.

CAC-40 Index Movers

L''Oreal SA led the decliners in the CAC-40 index of 4.65%, followed by losses in Lagardere SCA of 0.47%.

Vallourec SA gainers in the CAC-40 index with a rise of 5.67%, followed by gainers in Alcatel-Lucent of 4.64%, in Societe Generale SA of 4.54%, in Credit Agricole SA of 4.13% and in ArcelorMittal of 4.04%.