European Markets Up; Peugeot, Lufthansa Rise

Mayank Mehta
02 Mar, 2010
New York City

European markets rebounded for the second day after Greece is likely to deepen budget cuts. Automakers gained after PSA Peugeot Citroen indicated positive outlook for the year. Luxottica Group fell after earnings declined. Lufthansa reported lower than anticipated loss.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets rebounded for the second day after Greece is likely to deepen budget cuts. Automakers gained after PSA Peugeot Citroen indicated positive outlook for the year. Luxottica Group fell after earnings declined. Lufthansa reported lower than anticipated loss.[/R]

Greek government is expected to announce additional and deeper cuts to tame its estimated budget deficit from 8.7% to 6.7% in the current year.

Bowing to pressures from the European Union regulators and demands of the German and French investors, Greece is looking to increase taxes on tobacco, alcohol and general sales and cut benefits to government employees.

The additional budget cuts are scheduled to be announced as early as tomorrow ahead of the meeting between Prime Minister George Papandreou and German Chancellor Angela Markel in two days.

The euro traded higher at $1.3548 to and one dollar traded at 89.08 yen.

Industrial producer price index or wholesale inflation increased in January 0.7% from December in the euro area of sixteen nations and 0.9% in the wider zone of 27 nations.

The preliminary estimate of annual inflation in the Euro area is expected to be 0.9% in February after rising at 1.0% in January.

In London FTSE 100 Index closed higher 78.12 or 1.45% to 5,484.06, in Paris CAC 40 Index increased 42.38 or 1.12% to close at 3,811.92, in Frankfurt DAX index higher 63.05 or 1.10% to close at 5,776.56. In Zurich trading SMI increased 28.56 or 0.42% to close at 6,820.04.

Yara International ASA based on Oslo, Norway may have to revise its bid to acquire U.S. based Terra Industries Inc. CF Industries Holdings Inc offered to $4.73 billion or $37.15 in cash and 0.0953 of its share for each share of Terra.

Terra agreed to be acquired by Yara for $4.1 billion.

Gainers & Losers

Ansaldo STS SpA rose 0.6% to €14.50 after the train signals maker said 2009 revenues rose 6.3% to €1.18 billion from €1.11 billion a year ago. Net profit for the year rose 13% to €87.8 million or €0.88 per diluted share compared to net profit of €77.6 million or €0.78 per share a year ago.

Belvedere SA fell 0.03% to €30.79 after the Euronext reported that company will issue and trade on Euronext on March 3, a total number of 58,405 new bonds with nominal value of €63,462.

Celesio AG the pharmaceutical distributor increased 3.0% to €22.35.

Colas SA fell 1.9% to €172.57 after the road builder said 2009 revenues fell 9.4% to €11.6 billion from €12.8 billion a year ago. Net profit for the year fell 21% to €387 million compared to net profit of €490 million a year ago.

Deutsche Telekom AG fell 0.9% to €9.48 after the phone company was downgraded to “equalweight” from “overweight” at Barclays Capital.

Deutsche Boerse AG an international financial marketplace operator gained 0.2% to €51.44.

Deutsche Lufthansa AG added 3.3% to €11.48 an airline said fiscal 2009 sales fell 10% to €22.3 billion from €24.8 billion a year ago. Net loss for the year was €112 million compared to net profit of €542 million a year ago.

Lafarge S.A fell 0.2% to €47.95 after the cement maker had the outlook on its BBB- long-term credit rating cut to negative from stable by Standard & Poor’s.

Lanxess AG dropped 2.6% to €28.41 after the publicly traded specialty chemicals maker was downgraded to “neutral” from “buy” at Bank of America Merrill Lynch Global Research.

Luxottica Group S.p.A dropped 2.8% to €19.15 after the manufacturer of eyeglass frames said fourth quarter revenues fell 6.4% to €1.16 billion from €1.24 billion a year ago. Net profit for the quarter fell 8.4% to €35.6 million or €0.08 per ADS compared to net profit of €38.8 million or €0.08 per ADS a year ago.

Riber SA climbed 2.5% to €1.19 after the maker of machines to produce semiconductor wafers sold a machine to a laboratory in Toulouse for an undisclosed sum.

Rhodia the maker of plastics and perfume ingredients rose 0.9% to €14.90.

Veolia Environnement the water company added 0.4% to €24.30.

Wendel SA the private-equity firm fell 0.8% to €42.11.

DAX Index Movers

Deutsche Telekom AG led the decliners in the DAX index of 0.16%, followed by Adidas AG of 0.13%.

BMW AG led gainers in the DAX index with a rise of 3.68%, followed by increase in Deutsche Lufthansa AG of 3.61%, in Deutsche Post AG of 3.27%, in Metro AG of 3.12%, and in Infineon Technologies AG of 2.97%.

CAC-40 Index Movers

Essilor International led the decliners in the CAC-40 index of 0.55%. followed by France Telecom S.A. of 0.09%.

PSA Peugeot Citroen S.A. gainers in the CAC-40 index with a rise of 3.38%.followed by increase in ArcelorMittal of 3.08%, in L''Oreal SA of 2.69%, in Accor SA of 2.67% and in Renault SA of 2.59%.