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Market Update

Euro Zone Growth Slows, Eutelsat Plummets 30%

Author: Lucy Stoeva
Last Update: 12:19 PM ET May 13 2016

4:00 PM Frankfurt, Germany – European stock markets rebounded from the earlier losses after the euro zone economic growth was below expectations. Eutelsat plummeted 27% after the satellite operator negatively revised its forecasts due to slow industry growth. Ubisoft soared 8% after the French video games maker announced an improved outlook.

European stock markets rebounded from the earlier losses after strong U.S. retail sales data offset the weaker-than-expected economic growth in the euro zone.

U.S. retail sales recorded their largest increase in a year, up 1.3% in April, the Commerce Department said.

Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.9% in April, compared to an upwardly revised 0.2% gain in March.

In the euro zone, gross domestic product increased 0.5% over the first quarter, or at an annualized growth rate of 2.1%, Eurostat said.

The economic growth was below expectation for quarterly growth of 0.6% and an annualized rate of 2.2%.

In Germany, GDP expanded 0.7% in the first quarter, significantly higher than the growth rate of 0.3% in the fourth quarter of 2015, the Federal Statistics Office said. The data is equivalent to an annualized rate of 2.7%.

Following the data, the euro slid 0.7% against the dollar to $1.1294.

Among major movers, Eutelsat Communications plummeted 27.2% after the world’s third-largest satellite operator negatively revised its full-year forecasts due to slower industry growth.

The news affected the entire sector; shares of competitors SES dropped 8.1%, while Inmarsat lost 4.5%.

Oil prices also retreated, weighing on energy shares. Brent crude oil futures lost 1.4% to $47.42 per barrel, while WTI crude oil futures fell 1.9% to $45.82.

Among energy stocks, Tullow Oil erased 2.8%, BP and Royal Dutch Shell fell 1.2%, Seadrill lost 1.9%, and Total shed 0.7%,

On the upside, Ubisoft soared 8.1% after the French video games maker announced growing sales and an improved outlook.

In London, the FTSE 100 index edged up 12.81, or 0.21%, to 6,117, while in Frankfurt, the DAX index added 83.92, or 0.85%, to 9,946.04.

In Paris, the CAC 40 index climbed 26.57, or 0.62%, to 4,319.84.

All three major markets are heading towards closing the week flat, with gains or losses of about 0.1%.

BMW AG fell 3.5% to €73.57 after trading without the rights to the latest dividend.

Bouygues SA rose 3% to €29.77 after the French conglomerate reported an improvement in its telecom business, despite a wider quarterly net loss.

Net loss increased to €180 million in the quarter ended March from €157 million a year earlier, mainly due to one-time charges at the construction, television, and telecom businesses.

Revenue declined 3% to €6.53 billion from last year after a decline in construction revenue offset higher sales at Bouygues Telecom.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc