Daily Comments
Europe: investors hopeful of quick Greek debt deal
27.01.2012 14:13:00 Natalia Asedova, Analyst, Global Markets (Finam)
On Thursday, January 26, major European benchmarks pushed higher as the Federal Reserve boosted market sentiment by saying it would likely keep interest rates low until at least late 2014 and a report said Greece’s creditors will make a new offer for a debt swap.
The Institute of International Finance, which represents private-sector creditors, said "some progress was made" in negotiations yesterday. According to some reports, the creditors are now inclined to accept bigger losses on their bondholdings and may agree to an average interest rate of 3.75% on bonds issued as part of a debt restructure. Greek government spokesman Pantelis Kapsis said his country planned to wrap up the deal by the end of this week.
As for the day’s key economic data, Germany’s GfK consumer confidence index firmed to 5.9 in February from 5.6 in January, beating economists’ estimates of remaining flat m-o-m. France’s consumer confidence was up, as well, coming in at 81 in January vs. 80 in the prior month. Sweden came out with encouraging consumer confidence numbers, too. The metric jumped to -1.3 in January from -7.4 in December. As far as Italy is concerned, consumer confidence was unchanged m-o-m in January, reaching 91.6, but missing analysts’ forecasts of improving to 92. In other macroeconomic news, Sweden’s unemployment rate rose to 7.1% in December from 6.7% in November, undershooting the projected 7%.
Britain’s FTSE 100, France’s CAC 40 and Germany’s DAX added 1.26%, 1.53% and 1.84%. The regional benchmark STXE 600 was up 1.14%, ending 257.86.
Commodities plays outperformed the broader market, buoyed by advancing commodities prices, with BHP Billiton, Anglo American and Rio Tinto Group jumping 3.3%, 3.1% and 4.9%. European steelmakers posted gains, as well. ThyssenKrupp, ArcelorMittal and Salzgitter ended up 4.5%, 3.8% and 6.8%.
Finnish cell phone maker Nokia rose 2.7% as its smartphone sales totaled 19.6 mn units in Q4, exceeding forecasts of 18.5 mn units.
Europe’s second-biggest low cost airline EasyJet surged 10% after reporting a 17% increase in revenue in the first six months of the fiscal year ended December 31.
The world’s biggest computer mice maker Logitech International plunged 12% after cutting its sales and operating profit guidance for the fiscal year ending March 31 as weaker euro and sluggish demand for web cams and remote controls is expected to eat away at profits.
Futures on European benchmarks were in retreat from yesterday’s highs before the opening bell rang on European bourses ahead of the outcome of Greek debt restructuring talks and amid a mixed external news flow, as stocks ended lower on Wall Street overnight, while Asian benchmarks have been trading mostly higher today.
As of 07:37 GMT futures on Britain’s FTSE 100 for delivery in March were off 0.49%, while futures on Germany’s DAX with delivery in March and France’s CAC 40 with delivery in February were 0.43% and 0.28% lower, respectively.
| Index | Country | Value | Change | Change, % | YTD, % |
|---|---|---|---|---|---|
| ATX | Austria | 2,138.87 | 75.04 | 3.64% | 13.07% |
| BEL20 Index | Belgium | 2,252.03 | 57.50 | 2.62% | 8.09% |
| FTSE 100 | United Kingdom | 5,795.20 | 72.20 | 1.26% | 4.00% |
| DAX Index | Germany | 6,539.85 | 118.00 | 1.84% | 10.88% |
| IBEX 35 INDEX | Spain | 8,713.80 | 158.40 | 1.85% | 1.72% |
| S&P/MIB | Italy | 16,111.00 | 270.80 | 1.71% | 6.77% |
| AEX | Netherlands | 322.82 | 3.38 | 1.06% | 3.31% |
| OMX Nordic 40 | Scandinavia | 958.84 | 15.58 | 1.65% | 6.57% |
| CAC 40 | France | 3,363.23 | 50.75 | 1.53% | 6.44% |
| SMI | Switzerland | 6,100.43 | 27.07 | 0.45% | 2.77% |
