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.
European equities started the session lower despite overnight gains on Wall Street, with sentiment weighed down by news of an Ebola case – but not contagion – in New York and a report that Chinese house prices fell for the first time in September.
Irish drinks group C&C has muscled in on rival Greene King's £723m attempt to buy UK pub group Spirit Pub Company.
UK stocks experienced some selling pressure on Friday morning after rising to their highest in two weeks, as renewed concerns about the spread of Ebola weighed on market sentiment.
Welcome to our rolling coverage of the Ebola crisis. Refresh for updates on the outbreak as they happen.
Insurance group Amlin has signed a previously-announced deal to lift its stake in the Leadenhall Capital Partners (LCP) joint venture it set up in 2008.
0854: Stocks are wavering a tad at the start of trading after news broke overnight of a case of Ebola in New York. Analysts however are stressing that it is not a case of contagion but rather of a healthcare worker recently returned from travels in Africa. To take note of, Shanghai and Tokyo stocks have finished in the blue today. Tesco is at the bottom of the pile once again, with some rather poor coverage in this morning’s Lex column surely not helping matters any. The current price-earnings multiple of the shares is not attractive, Lex reasons. Shire is due to publish its results later in the morning. BskyB and ITV are on the up. Third quarter GDP estimates are set for release this morning by ONS. Market commentary is also focusing on this coming weekend’s European bank ‘stress test’ results. FTSE 100 down 36 to 6,383.
Publishing and education group Pearson has revealed that its chief financial officer (CFO) is to step down after 10 years of service, as the Financial Times owner reiterated its profit guidance for the full year.
Craig Spencer, a New York-based doctor who has recently been working in Guinea, has become the fourth person in the US to have been diagnosed with the deadly virus.
Molten metal flow engineering firm Vesuvius said it has seen a "softening in market conditions in certain regions" since the half-year stage, but its full-year outlook hasn't changed.
Aerospace and defence group Rolls-Royce has formed a joint venture with Safran's Hispano-Suiza to make parts for Rolls' commercial aircraft jet engines.