Bloomberg News

European Stocks Are Unchanged; BMW, Daimler Lead Carmakers Lower

November 18, 2011

Nov. 16 (Bloomberg) -- European stocks ended the day unchanged, after swinging between gains and losses, as Mario Monti became Italy’s new prime minister amid concern the sovereign-debt crisis is hurting the global economy.

Infineon Technologies AG, Europe’s second-largest semiconductor maker, fell after saying sales will decline in 2012. Bayerische Motoren Werke AG and Daimler AG led a retreat in European carmakers. Vivendi SA advanced after reporting third-quarter profit that beat analysts’ estimates.

The Stoxx Europe 600 Index was unchanged at 237.04 at the close in London. The gauge earlier climbed as much as 1.2 percent and dropped as much as 0.7 percent as the European Central Bank was said to buy Italian and Spanish bonds and the Bank of England warned that failure to tackle the debt crisis could affect economic growth.

“The market is reacting very strongly to any news,” said Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg. “The political situation will remain a determining factor. We’ll see what happens with Italy.”

The benchmark measure has declined 19 percent from this year’s high on Feb. 17 as European Union policy makers struggle to contain a crisis that has Greece on the edge of a default and the region’s highly indebted nations grappling with record bond yields.

Monti Takes Charge

Mario Monti was sworn in today as Italy’s new prime minister in a ceremony in Rome presided over by President Giorgio Napolitano.

“Market participants do not want to give up hope on a resolution of the EU crisis as the EU remains focused on finding means to expand its bailout fund,” said Stephane Ekolo, chief European strategist at Market Securities in London.

National benchmark indexes rose in 11 of the 18 western- European markets today. France’s CAC 40 Index added 0.5 percent, the U.K.’s FTSE 100 Index slid 0.2 percent and Germany’s DAX Index lost 0.3 percent.

Infineon dropped 3 percent to 6.26 euros. The company expects sales in fiscal 2012 to decline by a “mid-single digit percentage” compared with 2011 as customers hold off on making orders.

BMW and Daimler, the world’s biggest makers of luxury cars, lost 3.2 percent to 55.71 euros and 0.9 percent to 32.23 euros, respectively. Carmakers posted the worst performance among the 19 industry groups in the Stoxx 600 today, losing 1.4 percent.

Vivendi Gains

Vivendi advanced 5.6 percent to 16.34 euros. The owner of the world’s largest video-game and music companies reported third-quarter profit that exceeded analysts’ estimates, helped by its Activision Blizzard and GVT divisions.

Michael Page International Plc, the recruiter that operates across 32 countries, climbed 5.8 percent to 385.4 pence. Randstad Holding NV, a provider of temporary employees, rose 4.3 percent to 23.05 euros. Adecco SA, the world’s biggest supplier of temporary workers, jumped 3.2 percent to 38.59 Swiss francs. HSBC raised its recommendation on all three stocks to “overweight” from “neutral.”

“The leading indicators for labor markets, vacancies, are coming back and, crucially, corporates are filling them at a reasonable pace,” HSBC analysts wrote in a note.

Home Retail Group Plc, which owns the Argos catalog stores, sank 7.5 percent to 72.7 pence as Deloitte LLP predicted that this Christmas may be the first in the U.K. with no growth in retail sales since 2008. December retail revenue in the country will be no better than last year’s 36.2 billion pounds ($57 billion), Deloitte said.

“It’s as tough as anyone can remember and with sales flat at best this year it’s going to be harder than ever before to be in the winners’ enclosure,” Ian Geddes, retail partner at Deloitte, said in an interview.

--With assistance from Julie Cruz in Frankfurt and Adam Haigh in London. Editors: Srinivasan Sivabalan, Will Hadfield

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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