Market Commentary and Intraday News

French Market Advances Amid Upbeat Corporate News

222 days ago

(RTTNews) - The French market is moderately higher in afternoon trading Thursday, as investors shrugged off Spain's downgrade by Standard & Poor's and welcomed some positive corporate news from the region. That said, debt concerns continued to linger in the background, limiting the upside.

Standard & Poor's lowered Spain's long-term credit rating by two notches to "BBB-" from "BBB+" with a negative outlook, citing a deepening recession and growing concerns about the country's ability to deal with the region's debt crisis. The S&P's rating action brings it in line with Moody's Baa3 rating.

Meanwhile, International Monetary Fund Managing Director Christine Lagarde said the struggling euro area member Greece requires two more years to meet its budget targets and should be brought back to its feet.

"This is what we advocated for Portugal, this is what we advocated for Spain, and this is what we are advocating for Greece, where I said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation program that is considered," Lagarde said at a news conference ahead of the IMF-World Bank annual meetings in Tokyo.

The European Central Bank said in its monthly bulletin that the governments should continue to implement necessary measures to reduce fiscal and structural imbalances. The bank said Eurozone countries should proceed further with financial sector restructuring measures.

Italy's borrowing costs for three-year funds increased at a bond auction as Spain's rating downgrade coupled with the uncertainty about that country's bailout request weighed on investor sentiment.

The Treasury sold 3.75 billion euros of its three-year benchmark BTPs. The yield climbed to 2.86 percent from 2.75 percent at the prior auction on September 13.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.64 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.47 percent.

The CAC 40 index is currently advancing 0.69 percent.

Carrefour is gaining 3.8 percent. Luxury group LVMH is gaining 3.2 percent.

Credit Agricole and Societe Generale are advancing 2.9 percent and 2.3 percent, respectively. BNP Paribas is moderately higher.

Alcatel Lucent is falling 2.3 percent. EADS is losing 1.4 percent even though several analysts upgraded the stock after the company dropped its merger plan with BAE Systems.

Elsewhere in Europe, the German DAX is gaining 0.80 percent and the UK's FTSE 100 is rising 0.58 percent. Switzerland's SMI is advancing 0.24 percent.

Across Asia/Pacific, China's Shanghai Composite Index fell 0.8 percent, Japan's Nikkei 225 dropped 0.6 percent and Australia's All Ordinaries slid 0.2 percent. Hong Kong's Hang Seng, however, bucked the trend and added 0.4 percent.

In the U.S., futures point to a higher open on Wall Street. In the previous session, stocks saw notable weakness as traders expressed continued concerns about the outlook for the global economy. The major averages ended the day firmly in negative territory, near their lows for the session. The Dow plunged 1 percent, the Nasdaq fell 0.4 percent and the S&P 500 slid 0.6 percent.

In the commodity space, crude for November delivery is advancing $0.61 to $91.86 per barrel and December gold is gaining $5.8 to $1770.9 a troy ounce.

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