| CATEGORY: MARKET REPORT - EUROPE CLOSE |
European close: Greece woes sink bourses |
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Thu 25 Feb 2010
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LONDON (SHARECAST) - Europe’s top stocks tumbled near the close on renewed concerns about the debt crisis in Greece.
Moody’s Investors Service warned in the early hours of Thursday morning that any changes in its ratings on Greece depend on the government of Greece doing what it has promised.
Rival ratings agency Standard & Poor's said yesterday that it could further downgrade Greece's BBB-plus rating by one or two notches within a month.
The news comes amid rumours that the Greek government plans to issue a new 10-year bond next week. The government aims to raise between €3bn and €5bn from the issue.
Tensions were also running high after Greece lashed out at fellow euro zone member Germany, the country thought most likely to carry most of the cost if Greece needs to be bailed out. Deputy prime minister Theodoros Pangalos said Germany had no right to reproach Greece for anything after it devastated the country during the second World War.
Across the markets, the Dax in Frankfurt closed down 83 at 5,532, with the CAC in France down 74 points to 3,640.
Banks are in focus after both Credit Agricole and Royal Bank of Scotland published their results.
Credit Agricole posted lower-than-expected quarterly profits after being hit by losses in Greece, but said it has made a good start to 2010. The French bank’s net income totaled €433m in the three months period ended 31 December, better than the €309m loss a year earlier but worse than forecasts of a €476m profit.
In the third quarter, Agricole made a profit of €289m. For the whole of 2009, profits rose 10% to €1.12bn. ‘Initial trends in 2010 confirm that all of the group's businesses are performing well,’ the Paris-based firm said.
Nomura says Commerzbank’s recent numbers highlight the material uncertainties, risks and challenges it faces in successfully integrating Dresdner Bank and dealing with its risky assets.
“Until we have some clarity on the various moving parts of the business we continue to retain our Neutral rating on this name,” said the broker which slashed its target price from €7.21 to €4.70.
Meanwhile, UK peer RBS surprised the market with figures suggesting that there is light at the end of the tunnel for the bank. The part-nationalised bank saw its net attributable loss narrow markedly in 2009 with fourth quarter impairments 5% lower than the third quarter.
Elsewhere on the corporate earnings front, France Telecom saw full-year net profits drop 26% to €3bn from €4.1bn last year.
Meanwhile, Telecom Italia postponed the Thursday release of its year-end results due to an investigation into its Sparkle unit for alleged fraud and money laundering.
However, the group reaffirmed its organic cash flow generation target for 2010 and 2011.
BASF is on the rise after the German chemicals group swung to a fourth-quarter net profit of €455m compared with a loss of €313m.
In economic news, the European Commission's overall economic sentiment indicator for the euro zone fell to 95.9 in February from 96.0 in January.
CAC 40 - Risers
France Telecom (FTE) € 17.01 +0.98%
CAC 40 - Fallers
Renault (RNO) € 29.42 -4.79%
AXA (CS) € 14.40 -3.36%
Saint Gobain (SGO) € 32.00 -3.34%
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