| CATEGORY: MARKET REPORT - EUROPE CLOSE SECTOR: BANKING |
European close: Spain downgrade weighs |
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Wed 09 Dec 2009
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LONDON (SHARECAST) - Europe’s top traded in and out of the blue early on but closed lower after ratings agency Standard & Poor’s has lowers its outlook on Spain to negative due to fears over the country’s economic growth.
Spain is struggling with unemployment close to 20% and remains in recession, despite a return to growth in the EU overall.
Spanish officials say they expect the country to resume growth in the first quarter of 2010, but S&P is concerned that growth will be lower than expected.
The ratings group is also worried about Spain’s high fiscal deficit.
In the UK, Alistair Darling’s pre-Budget speech confirmed fears in the City that bankers’ bonuses would be hit with a ‘super tax’, although he has promised to halve the budget deficit by 2013-14.
Among the banks closing in the red were Commerzbank, BNP Paribas Deutsche Bank and UBS.
Across the markets, the German DAX closed down 41 points at 5,648 with the French CAC falling 28 points to 3,757. The Swiss market was 48 points lower at 6,352.
Volkswagen has agreed to buy a one-fifth stake in Suzuki Motor only days after formally taking a 49.9% holding in Porsche.
Europe’s biggest carmaker will buy 19.9% of Suzuki for 222.5bn yen (around £1.5bn) by January 2010. Suzuki will also acquire a stake Volkswagen, the two carmakers said in a joint statement.
No financial details have been disclosed but the statement said Suzuki intends to invest ‘up to one half of the amount received from Volkswagen into shares of Volkswagen.’
In economic news, German exports rose more than expected in October, fuelling hopes that Europe's largest economy is on track to recovery. The country’s exports gained 2.5% to €69.9bn from September, when they gained 3.6%, according to the Federal Statistics Office.
Germany’s trade surplus rose to €13.6bn in October compared with a surplus of €10.4bn in September. The current account surplus rose to €11.0bn from €9.3bn in the previous month.
Elsewhere, German consumer prices fell by 0.1% on a month-to-month basis in November but rose 0.4% from a year earlier, the first annual gain in seven months.
CAC 40 - Risers
Unibail-Rodamco (UL) € 152.90 +0.92%
ArcelorMittal SA (MT) € 27.15 +0.74%
Air Liquide (AI) € 79.46 +0.35%
BNP Paribas (BNP) € 54.71 +0.31%
EDF (EDF) € 39.65 +0.30%
Sanofi-Aventis (SAN) € 52.55 +0.19%
Bouygues (EN) € 34.28 +0.15%
Suez Environnement Company (SEV) € 15.66 +0.03%
CAC 40 - Fallers
AXA (CS) € 15.71 -3.80%
Lagardere SCA (MMB) € 29.03 -2.70%
Vallourec (VK) € 113.30 -2.16%
Alcatel-Lucent (ALU) € 2.31 -2.12%
Peugeot (UG) € 23.28 -1.98%
ST Microelectronics (STM) € 5.67 -1.95%
Renault (RNO) € 34.30 -1.85%
Dexia (DEXB) € 4.80 -1.68%
L'Oreal (OR) € 74.41 -1.55%
Alstom (ALO) € 47.72 -1.39%
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