Market Commentary and Intraday News

European Markets Trading Higher Amid Buoyant Corporate News

223 days ago

(RTTNews) - The European markets are trading 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 0.55 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.44 percent.

The German DAX is gaining 0.76 percent and the French CAC 40 is rising 0.62 percent. The UK's FTSE 100 is advancing 0.59 percent and Switzerland's SMI is advancing 0.28 percent.

In Frankfurt, Deutsche Bank is gaining 2.3 percent and Commerzbank is rising 1.8 percent.

Lanxess and Lufthansa are advancing 2 percent and 1.8 percent, respectively.

Suedzucker is up 1.1 percent after reporting higher first-half profit.

HSBC cut Fresenius to "Neutral" from "Overweight." The stock is up 0.5 percent.

Siemens is losing 0.6 percent. Deutsche Bank cut the stock to "Hold" from "Buy."

Pfeiffer Vacuum is declining close to 6 percent. Deutsche Bank cut the stock to "Sell" from "Hold."

Carl Zeiss is falling 2.4 percent after HSBC reduced its rating on the stock.

Qiagen is losing 1.2 percent on a broker downgrade.

In Paris, 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.

BAE Systems, which also received positive broker recommendations after the decision, is up 2 percent in London.

In the U.K., Burberry is leading the gainers by jumping 10.2 percent. The luxury group said in a trading update that first-half revenues improved despite weakness in China and the U.K.

Croda is gaining 3.6 percent and Petrofac is rising 2.8 percent.

WM Morrison Supermarkets is falling 1.5 percent. Credit Suisse reduced its rating on the stock.

WH Smith is dropping 3.5 percent. The retailer reported lower revenues for the year and announced the departure of its Chief Executive Kate Swann after nine years in the role.

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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