Markets & Finance

Europe Stocks Close Lower


European stock markets closed lower on Wednesday. London's FTSE 100 index was off 48.3 points, or 1.07%, to 4,464.1, even though Britain's first-quarter gross domestic product was revised to 0.7%, or 3.4% on an annualized basis, from 0.6%, or 3.0%, year-over-year. Gallaher was lower on brokerage downgrades. Exel was higher, boosted by bullish comments from both JP Morgan and Morgan Stanley. Ashtenne was higher after announcing plans to return capital to shareholders following the sale of some assets.

Germany's DAX index gained slipped 17 points, or 0.42%, to 4,052.73 after reports that Eurozone June economic confidence fell to 99.8 from 100.1 in May, but the June business climate rose to 0.43 from 0.29 in May. In other news, eurozone June flash CPI rose 2.4% year-over-year after rising 2.5% in May. HypoVereinsbank was higher after an FT report says the company sees no pan-European merger in the short term. Infineon Technologies was higher after naming Hermann Eul to run fixed-line telco unit. Merck AG was higher after receiving European approval for its key colorectal cancer drug Erbitux.

In Paris, the CAC 40 index eased 23.49 points, or 0.63%, to 3,732.99 following reports French consumer confidence was unchanged in June and the French jobless rate remained at 9.8% but the number of jobless rose 14,000. Euro Disney was higher after saying it would launch a 250 million euro rights issue as part of a three-part plan to restore its profitability. France Telecom was lower after the Financial Times says the company may be asked by the EU to repay hundreds of millions of euros in back taxes. Clarins was lower after saying it will terminate its U.S. distribution contract with Procter & Gamble at the end of 2005.

Asian markets finished mixed on Tuesday. In Japan, the Nikkei index lost 1.94 points, or 0.02%, to close at 11,858.87 as investors stayed sidelined ahead of the FOMC meeting later today and Japan's Tankan corporate poll due out tomorrow. Select blue chips such as Toyota Motor and Mitsubishi Tokyo Financial Group edged higher, while Toshiba sank on dilution worries after it said it would issue up to 150 billion yen worth of EuroYen convertible bonds. Separately, the release of the Bank of Japan's June Tankan survey on Thursday is widely expected to underscore a broadening upturn underway in the Japanese economy. Action Economics' projection for the headline diffusion index for large manufacturers at +17, improving from +12 in March to its highest since 1991, would be in line with the consensus forecast.

In Hong Kong, the Hang Seng index added 169.45 points, or 1.40%, to close at 12,285.75, helped by upbeat consumer confidence data reported in the U.S. last night. Property names rallied after S&P Ratings raised Hong Kong's long-term currency rating to stable on Tuesday, giving stocks related to consumer spending a boost.


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