Iceland, Greece Worries European Markets

Mayank Mehta
30 Mar, 2010
New York City

European markets closed lower after the rating agency S&P lowered its rating on Iceland debt. Greek bonds declined on the first day of trading on the worries that the nation will struggle with deficit reduction. Swiss Life net declined 20% in 2009.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets closed lower after the rating agency S&P lowered its rating on Iceland debt. Greek bonds declined on the first day of trading on the worries that the nation will struggle with deficit reduction. Swiss Life net declined 20% in 2009. Vinci SA won the largest rail project connecting two cities in France.[/R]

European markets edged lower as concerns about the sovereign debt broadened to Iceland from Greece.

Greece completed the sale of its 7-year notes that will help the nation to refinance the debt of 15.5 billion euros that matures next month. However, the bond edged lower on the first day of trading on the worries that Greece may struggle to lower its debt.

The ASE Index in Athens declined 2%.

In London FTSE 100 Index closed lower 38.34 or 0.67% to 5,672.32, in Paris CAC 40 Index decreased 13.25 or 0.33% to close at 3,987.41, in Frankfurt DAX index lower 14.40 or 0.23% to close at 6,142.45. In Zurich trading SMI increased 20.84 or 0.30% to close at 6,871.42.

Standard & Poor’s lowered its credit rating on local currency debt issued by Iceland. The long and short term credit ratings were lowered to BBB/A-3 from BBB+/A-2. The rating agency left unchanged its rating on the foreign currency debt at the same level now of the local currency with negative outlook.

Iceland is still negotiating with UK and Holland to cover the repayment of $5.3 billion loans after the 2008 failure of Landsbanki Islands hf. Iceland citizens rejected in a referendum related to the loans by 93% on March 6.

Gainers & Losers

ACEA SpA fell 6.0% to €7.44 after the utility company said 2009 revenues fell 7% to €2.95 billion from €3.14 billion a year ago. Net loss for the year was €52.5 million compared to net profit of €186.3 million a year ago.

Deutsche Bank AG rose 0.8% to €58.33 after the bank has announced that its wholly owned subsidiary Deutsche New Zealand will acquire a 49.9% interest in Craigs Investment Partners.

ElringKlinger AG fell 1.9% to €19.49.

Iride SpA dropped 0.7% to €1.39 after the utility company said 2009 revenues fell 12% to €2.2 billion from €2.5 billion a year ago. Net profit for the year fell 94% to €6.4 million compared to net profit of €111.3 million a year ago.

Manz Automation AG dropped 0.9% to €57.64 after the company announced that it is forecasting high double-digit percentage revenue growth and positive EBIT for 2010.

Mastrad SA the cooking utensils maker rose 4.0% to €4.16.

Singulus Technologies AG rose 0.5% to €4.92 after the maker of machines that produce compact discs and DVDs was upgraded to “hold” from “sell” at Deutsche Bank AG.

STADA Arzneimittel AG fell 1.7% to €29.73 after the generic drug maker said 2009 sales fell 10.5% to €1.57 billion from €1.65 billion a year ago. Net profit for the year rose 32% to €100.4 million or €1.70 per diluted share compared to net profit of €76.2 million or €1.28 per share a year ago.

Swiss Life Holding the providers of life insurance and pension solutions said 2009 net earned premiums fell 10.5% to CHF11.9 billion from CHF13.3 billion a year ago. Net profit for the year fell 20.6% to CHF278 million or CHF8.83 per diluted share compared to net profit of CHF350 million or CHF10.88 per share a year ago.

Thales SA climbed 3.0% to €30.09 after the military electronics maker was upgraded to “buy” from “hold” at Citigroup Inc.

Trigano SA the maker of recreational vehicles rose 3.1% to €17.48.

Vinci SA rose 1.5% to €44.16 after the company was selected for a €7.2 billion order to build and operate a high-speed rail line between the French cities of Tours and Bordeaux in one of the world’s largest state-sponsored contracts.

Wendel SA fell 1.1% to €45.72 and the investment company said 2009 sales fell 9% to €4.9 billion from €5.4 billion a year ago. Net loss for the year was €918.3 million compared to net profit of €158.1 million a year ago.

Wirecard AG the maker of online payment software plunged 26.8% to €5.50.

DAX Index Movers

Commerzbank AG led the decliners in the DAX index of 3.35%, followed by ThyssenKrupp AG of 2.98%, in Infineon Technologies AG of 2.66%, in MAN SE of 2.12%, and in Volkswagen AG of 1.86%.

Metro AG led gainers in the DAX index with a rise of 1.72%, followed by increase in RWE AG of 1.41%, in E.ON AG of 1.33%, in Deutsche Bank AG of 0.80%, and in Fresenius SE of 0.72%.

CAC-40 Index Movers

Alcatel Lucent led the decliners in the CAC-40 index of 3.90%, followed by Michelin SCA of 3.49%, in EADS NV of 2.78%, in Renault SA of 2.52% and in Technip of 2.38%.

Pernod Ricard SA gainers in the CAC-40 index with a rise of 1.36%.followed by increase in Danone SA of 1.20%, in Electricite de Strasbourg SA of 0.90%, in Vinci SA of 0.74% and in GDF Suez SA of 0.73%.