EU Ministers' Greek Plan Revive Confidence

Mayank Mehta
16 Mar, 2010
New York City

European market indexes closed more than 1% after EU finance ministers agreed on framework in supporting Greece and rating agency Standard & Poor

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European market indexes closed more than 1% after EU finance ministers agreed on framework in supporting Greece and rating agency Standard & Poor’s reaffirmed its sovereign debt rating. Bulgari SpA swung loss and Swiss chocolate maker Lindt guided higher 2010 growth.[/R]

European market indexes gained more than 1% after EU finance ministers and regulators agreed on a strategic framework to offer assistance to Greece. The rating agency Standard & Poor’s kept its Greek sovereign debt rating at BBB+ and removed the country from the “negative credit watch” list.

S&P said that recently passed budget cuts of €4.8 billion will be sufficient to achieve the goal of reducing the budget deficit to 8.7% in the current year.

In London FTSE 100 Index closed higher 28.96 or 0.52% to 5,622.81, in Paris CAC 40 Index increased 49.98 or 1.28% to close at 3,940.89, in Frankfurt DAX index higher 64.96 or 1.10% to close at 5,968.52. In Zurich trading SMI increased 51.18 or 0.75% to close at 6,876.28.

The euro edged higher against the dollar and the UK pound after the EU ministers agreed on the broad framework of the Greek bailout measures. One euro fetched $1.375 and one pound traded at €1.102.

The annual inflation in the euro area declined to 0.9% in February from 1.0% in January and 1.2% in the month a year ago. In the wider EU zone the annual inflation in the month declined to 1.4% from 1.7% in January and from 1.8% a year ago month.

Swiss chocolate maker Lindt increased 3.6% after it guided higher organic sales growth and a focus on markets in Japan and China.

Bulgari SpA dropped more than 9% after it reported higher than expected fourth quarter loss.

Gainers & Losers

Alcatel Lucent SA rose 0.3% to €2.55 after the telecom carrier was downgraded to “hold” from “buy” at Royal Bank of Scotland Group Plc.

Altran Technologies SA gained 5.1% to €3.91 after the engineering and technology consulting company was upgraded to “hold” from “sell” at Deutsche Bank AG.

Assystem SA declined 2.3% to €9.65 after the software company said 2009 revenues fell 9% to €613.1 million from €672.1 million a year ago. Net loss for the year was €0.8 million or €0.04 per diluted share compared to net profit of €25.8 million or €1.27 per share a year ago.

Brembo SpA added 2.7% to €5.24 after the brakes maker said 2009 revenues fell 22% to €825.9 million from €1.06 billion a year ago. Net profit for the year fell 72% to €10.5 million or €0.16 per diluted share compared to net profit of €37.5 million or €0.56 per share a year ago.

BNP Paribas SA rose 1.1% to €56.85 after the bank may acquire KBC Groep NV’s operations in Japan according to a report on Reuters.

Bulgari SpA, the third largest global jeweler dropped 9.5% to €5.67 after the luxury jeweler said 2009 revenues fell 14% to €926.6 million from €1.08 billion a year ago. Net loss for the year was €47.1 million or €0.16 per diluted share compared to net profit of €82.9 million or €0.27 per share a year ago.

Chocoladefabriken Lindt & Spruengli AG the chocolate maker increased 3.6% to CHF 26,575 after it guided fiscal 2010 organic sales growth between 5% and 7% and operating earnings between CHF 300 million and CHF 340 million.

The company said 2009 revenues fell 2% to CHF2.53 billion from CHF2.57 billion a year ago. Net profit for the year fell 26% to CHF193.1 million or 850.9 per diluted share compared to net profit of CHF261.5 million or 1,140.4 per share a year ago.

Deutsche Bank AG added 1.7% to €53.47 after the bank reported fourth quarter net interest income fell 28% to €2.72 billion from €3.76 billion a year ago. Net income in the quarter was €1.32 billion or €2.00 per diluted share compared to net loss of €4.79 billion or €8.71 per share a year ago.

Groupe Steria SCA fell 0.3% to €22.91 an IT Services company said 2009 revenues fell 8% to €1.63 billion from €1.77 billion a year ago. Net profit for the year fell 6.6% to €48.2 million compared to net profit of €51.6 million a year ago.

G4S plc fell 2.6% to €271.30 an international security solutions provider said 2009 revenues rose 18.6% to £7.0 billion from £5.9 billion a year ago. Net profit for the year rose 34% to £202.5 million or 14.4 pence per diluted share compared to net profit of £151.2 million or 11.1 pence per share a year ago.

L'Oreal SA fell 0.7% to €21.44 after the cosmetics maker was downgraded to “reduce” from “neutral” at Nomura Holdings Inc.

Metropole Television SA rose 0.1% to €18.35 and the stock was downgraded to “hold” from “buy” at Citigroup Inc.

Munich Re closed unchanged at €116.09 after the reinsurer was downgraded to “hold” from “add” at Commerzbank AG.

SAES Getters SpA fell 1.6% to €6.00 after the variety of scientific and industrial applications provider said 2009 revenues fell 18% to €128.8 million from €156.7 million a year ago. Net loss for the year was €26.7 million or €1.20 per diluted share compared to net profit of €20.8 million or €0.88 per share a year ago.

Seche Environnement SA rose 0.5% to €54.69 after the specialist on the treatment and storage market for all types of non-radioactive waste said 2009 revenues fell 4.6% to €365.7 million from €383.2 million a year ago. Net profit for the year fell 21.5% to €24.9 million compared to net profit of €31.7 million a year ago.

Symrise AG closed unchanged at €16.65 after the maker of scents and flavors was downgraded to “hold” from “buy” at UniCredit SpA.

VM Materiaux SA fell 1.9% to €49.00 after the provider of building material and concrete maker said 2009 revenues fell 7% to €609.4 million from €655.5 million a year ago. Net profit for the year fell 29.5% to €13.4 million compared to net profit of €19.0 million a year ago.

DAX Index Movers

E.ON AG led the decliners in the DAX index of 0.48%, followed by Fresenius Medical Care AG & Co. KGaA of 0.17%, in Muenchener Rue AG of 0.04%, and in Henkel AG of 0.03%.

Infineon Technologies AG led gainers in the DAX index with a rise of 3.05%, followed by increase in Siemens AG of 2.87%, in Deutsche Bank AG of 2.67%, in Metro AG of 2.47%, and in Volkswagen AG of 2.26%.

CAC-40 Index Movers

Alcatel Lucent led the decliners in the CAC-40 index of 0.47%, followed by EADS NV of 0.03%.

Credit Agricole SA gainers in the CAC-40 index with a rise of 3.78%.followed by increase in ArcelorMittal of 2.56%, in Sanofi-Aventis of 2.50%, in BNP Paribas SA of 2.49% and in Renault SA of 2.23%.