European Automakers Face Steel Price Hike

123jump.com Staff
31 Mar, 2010
New York City

European markets closed lower as investors debate the direction of the euro. Greek bond yields rose for the third day in a row on the worries that Greece may need more emergency funding. The first estimate of inflation in the euro zone was 1.5%. Steelmakers prepare to pass 20% price hike.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets closed lower as investors debate the direction of the euro. Greek bond yields rose for the third day in a row on the worries that Greece may need more emergency funding. Preliminary estimate of inflation in the euro zone was estimated at 1.5%. Steelmakers prepare to pass 20% price hike.[/R]

European markets closed lower after Greek bond yields rose for the third day in a row and first estimate of inflation in the euro zone was estimated at 1.5%.

The preliminary estimate of annual inflation in the Euro area is expected to be 1.5% in March after rising at 0.9% in February.

In London FTSE 100 Index closed higher 7.32 or 0.13% to 5,679.64, in Paris CAC 40 Index decreased 13.40 or 0.34% to close at 3,974.01, in Frankfurt DAX index higher 11.10 or 0.18% to close at 6,153.55. In Zurich trading SMI increased 1.95 or 0.03% to close at 6,873.37.

Greek bonds declined today on the third day of this week as investors fear that Greece may have to use the emergency credit line established by EU nations with the IMF. The yields on 7-year bonds increase 8 basis points to 6.522%.

Greek Prime Minister George Papandreou today asked his ministers to accelerate and intensify their plans to meet budget targets.

National Bank of Greece and EFG Eurobank declined between 2% and 3%.

European automakers are bracing for higher steel prices after a recent price hike by iron ore miners. Chief Executive Laxmi Mittal of ArcelorMittal confirmed in an interview that higher iron ore prices will be passed on to steelmakers.

Vale SA and BHP Billiton revised prices for iron ore by 90% to $150 a metric ton and steelmakers are likely to ask 20% increase in price for flat rolled steel to $840 a ton from $700 a ton.

Gainers & Losers

Credito Emiliano SpA dropped 2.9% to €5.23 after the bank said 2009 net interest income fell 23.5% to €430.8 million from €562.8 million a year ago. Net profit for the year fell 43% to €88.8 million or €0.27 per diluted share compared to net loss of €155.8 million or €0.54 per share a year ago.

Daimler AG the maker of luxury cars rose 0.9% to €34.88 despite the talks of higher steel prices from steelmakers of as much as 20%.

Epigenomics AG fell 1.6% to €2.48 after the company announced that it has completed the placement of 14,697,361 new ordinary shares.

Hamburger Hafen und Logistik AG declined 9.3% to €28.10 after the port announced 2009 dividend of €0.40 per share on the Port Logistics subgroup shares traded on the stock exchange.

Heidelberger Druckmaschinen AG rose 2.7% to €5.46 after the company completed the restructuring announced in November 2009. From April 1 the Group will be split into the Heidelberg Equipment, Heidelberg Services, and Heidelberg Financial Services divisions.

MTU Aero Engines Holdings AG gained 4.1% to €43.44 after the engine maker rose on a broker recommendation.

Neopost SA decreased 3.8% to €58.91 after the provider of solutions for the mailing and logistics said 2009 sales fell 0.5% to €913.1 million from €918.1 million a year ago. Net profit for the year fell 6% to €147.9 million or €4.68 per diluted share compared to net profit of €157.0 million or €5.08 per share a year ago.

Nexans SA declined 2.8% to €63.07 after the maker of cables and wires was downgraded its recommendation to “underweight” from “neutral” at JPMorgan Chase & Co.

Orpea SA rose 0.8% to €30.75 after the commercial retirement- home operator said 2009 revenues rose 20% to €843.3 million from €702.3 million a year ago. Net profit for the year rose 26% to €61.0 million compared to net profit of €48.4 million a year ago.

Schneider Electric SA climbed 2.0% to €87.18 after the maker of circuit breakers stock was upgraded to “overweight” from “neutral” at JPMorgan.

DAX Index Movers

Deutsche Post AG led the decliners in the DAX index of 1.65%, followed by Adidas AG of 1.58%, in Metro AG of 1.58%, in Deutsche Bank AG of 1.57%, and in Deutsche Boerse AG of 1.28%.

Fresenius Medical Care AG & Co. KGaA led gainers in the DAX index with a rise of 1.51%, followed by increase in MAN SE of 1.39%, in BMW AG of 1.26%, in Siemens AG of 1.22%, and in Infineon Technologies AG of 1.14%.

CAC-40 Index Movers

BNP Paribas SA led the decliners in the CAC-40 index of 2.45%, followed by Alcatel Lucent of 2.17%, in PSA Peugeot Citroen S.A. of 1.96%, in Veolia Environnement of 1.57% and in Bouygues SA of 1.25%.

PPR SA gainers in the CAC-40 index with a rise of 1.77%.followed by increase in Schneider Electric SA of 1.65%, in Cap Gemini SA of 1.50%, in STMicroelectronics N.V. of 1.04% and in Essilor International SA of 0.98%.