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European Markets Notably Lower On Weak Data, France Polls

4/23/2012 7:30 AM ET

The European markets are notably lower on Monday, after unimpressive economic data and the election results from France dampened risk appetite across the region. The Asian markets fell and the U.S. index futures are lower.

Stocks with exposure to China came under pressure after the country's manufacturing activity shrank for a sixth consecutive month in April. The HSBC/Markit purchasing managers' index rose to 49.1 in April from 48.3 in March, with the reading below 50 still indicating a contraction in activity.

In the first round of the French Presidential Elections, Socialist leader Francois Hollande won the most number of votes, pushing incumbent Nicolas Sarkozy to the second place. Hollande has based his campaign mostly on tax-and-spend programs, higher taxes for the rich and promises to cut the country's widening budget deficit.

The election results have increased fears that the firefighting aimed at diffusing the debt crisis in Europe may see a setback.

Meanwhile, the Spanish economy slipped into a recession in the first quarter of 2012, the Bank of Spain said. Gross domestic product shrank 0.4 percent sequentially, slightly bigger than the 0.3 percent fall seen in the prior quarter.

The Euro Stoxx 50 index of eurozone bluechip stocks is declining 2.39 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 1.78 percent.

The German DAX is retreating 2.74 percent and the French CAC 40 is falling 2.27 percent. The UK's FTSE 100 is losing 1.68 percent and Switzerland's SMI is declining 1.71 percent.

In Frankfurt, Commerzbank is declining 5.3 percent. Deutsche Bank is falling 3.9 percent.

HeidelbergCement is retreating 4.9 percent. Deutsche Post is dropping 4.1 percent.

MAN, BMW, Volkswagen and Daimler are declining between 3.4 percent and 2.7 percent.

Bayer is down 2.8 percent and Basf is falling 2.5 percent.

Fresenius is falling 0.8 percent. Berenberg initiated the stock with a "Buy" rating.

Centrotherm Photovoltaics is surging 4.6 percent. Commerzbank raised Centrotherm to "Buy"from "Hold."

In Paris, ArcelorMittal is retreating 5 percent. Carmakers Renault and Peugeot are losing 4.3 percent and 3.1 percent, respectively.

Credit Agricole, Societe Generale and BNP Paribas are declining between 4.2 percent and 3.8 percent.

EADS is losing about 3 percent. UBS cut the stock to "Neutral" from "Buy."

Danone is gaining 2.6 percent. Nestle edged out the French dairy giant to buy Pfizer's nutrition business for nearly $12 billion. Nestle is falling 2.2 percent in Zurich.

France Telecom is down 0.5 percent. Nomura raised the stock to "Buy" from "Reduce."

In London, Old Mutual is declining 14 percent. Prudential is losing 3.7 percent.

Vodafone has decided to buy Cable & Wireless Worldwide for $1.7 billion in cash. Vodafone shares are marginally higher, while Cable & Wireless Worldwide is climbing 14.5 percent.

AstraZeneca agreed to acquire California-based biotechnology company Ardea Biosciences, Inc. for $1.26 billion. AstraZeneca stock is down 1.2 percent.

Lok'n Store Group is up about 3 percent after the company reported nearly 18 percent growth in revenues and higher operating earnings for the first half ended January 31.

Insurers ING and Aegon are declining 6.9 percent each in Amsterdam. Philips is advancing 4.3 percent after the consumer goods giant reported solid results for the first quarter.

In economic news, Eurozone private sector activity declined further to a 5-month low in April, flash estimate published by Markit Economics showed. The composite output index dropped unexpectedly to 47.4 in April from 49.1 in March. Economists were forecasting the reading to rise to 49.3.

Across Asia/Pacific, Australia's All Ordinaries lost 0.32 percent, China's Shanghai Composite Index dropped 0.76 percent, Hong Kong's Hang Seng retreated 1.8 percent and Japan's Nikkei 225 slipped 0.20 percent.

In the U.S., futures point to a lower open on Wall Street. In the previous session, the Dow rose half a percent and the S&P 500 edged up 0.1 percent, while the tech-heavy Nasdaq posted a modest 0.2 percent loss.

In the commodity space, crude for June delivery is sliding $0.84 to $103.04 per barrel and June gold is falling $11.7 to $1631.1 a troy ounce.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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