A.B. | ShareCast | 21 Jan, 2013 12:05 - Updated: 21:48 | | |
- Eurogroup to discuss bank liquidity injections
- Bundesbank does not expect weakness to last long
- Merkels CDU loses elections in Lower Saxony
- Juncker sees no decision tonight on Cyprus
- Richemont down on weakness in Asia Pacific
FTSE-Mibtel 30: 0.06%
Ibex 35: 0.23%
Stoxx 600: 0.16%
The major European equity benchmarks were trading near unchanged by the midday point of the session. That despite the unexpected election defeat of German Chancellor Angela Merkels CDU in the state of Lower Saxony and ahead of this evenings meeting of Eurogroup finance ministers.
The SPD/Greens won another state from Merkel's CDU/CSU/FDP coalition, even if only by one seat. Nevertheless, Barclays Research did not see the results as affecting policy-making at the federal level. Also to be taken into account, Merkel and her allies in the FDP continue to lead very comfortably in national polls (at 47% versus the SPD/Greens at 38%). Even so, the national elections could still become a tighter race than the latest polls suggest, those economists indicated.
Of interest, some reports indicated that Germanys Economics minister Rosler- had offered to tender his resignation following the defeat.
Discussions at Monday evenings Eurogroup meeting were expected to include the option of direct bank recapitalization by the European Stability Mechanism (ESM), the aid program for the Spanish banking sector, according to analysts, and the naming of the groupings new President. No decision was expected on Cyprus.
Acting as a backdrop, US markets were to remain closed in observance of the Martin Luther King Holiday. No less relevant was the start of the Bank of Japans two day policy meeting, after which it might unveil aggressive new policy measures at least on the monetary policy side.
Richemont weighs on the Stoxx
Luxury goods maker Richemont announced that sales in the last quarter of 2012 were flat in the Asia Pacific region, even if that follows on several years of exceptional growth in that area of the world, especially in China. To be had in account are the demanding comparative figures for the same quarter last year. As well, wholesale sales growth was lower than in the first six months and in the comparative period due to the cautious approach taken by the Groups retail partners in Hong Kong and mainland China.
Over the weekend German power producer E.On asked unions to return to talks.
In the latest edition of Der Spiegel EADS Chief Executive Tom Enders told the German government that it would not accept interference in the companys decisions on when and where to develop aircraft in the future.
Nokia might be looking to sell £625m in debt to benefit from the recent fall in market rates, according to a source cited by Bloomberg.
From a sector stand-point the worst performers were Personal and household goods (-0.75%), Media (-0.71%) and Real Estate (-0.19%).
Better than expected economic data
The Dutch consumer confidence index for the month of January improved to -36
points from -39 in the month before (Consensus: -39).
Spains trade deficit narrowed to 29.5bn euros in the 11 month until the end of November, but exports declined by 6% versus a year ago.
German producer prices fell by 0.3% month-on-month in December (Consensus: 0.0%).
In its monthly report for January the Bundesbank said that the weak business cycle should not last long.
Euro steady despite election results
The euro/dollar was standing 0.02% lower at 1.3318.
Front month Brent crude futures were down by 0.206 at $111.67.
09:45 Europe open
UK gross domestic product (GDP) rose an annualised 3% in the third quarter, as expected by analysts, the Office for National Statistics confirmed in its second estimate on Wednesday.
Nostrum Oil & Gas said its revenue in the nine to the end of September fell because of a decline in oil prices.
Half-year results for United Utilites showed modest improvements in revenues and profits, as the water company expressed confidence about the forthcoming new regulatory pricing structure after submitting a plan for lower prices.
UK stocks advanced on Wednesday as investors adopted an optimistic approach ahead of gross domestic product (GDP) figures in the UK.
A clinical trial of a psoriasis treatment by partners Astrazeneca and Amgen met its primary endpoints, the pharmaceutical companies announced on Wednesday.
Weak market conditions throughout Europe put gross margins under pressure at plumbing and heating products distributor Wolseley.
South Korean technology conglomerate Samsung is to raise 1.9trn won (£1.1bn) from selling stakes in four of its chemical and defence companies.
Catering group Compass lifted its annual dividend by over a tenth after an improvement in both sales and profits in the year to 30 September.
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