4:10 PM Frankfurt – European indexes closed higher and commodities prices gained in international trading. Euro zone current account surplus declined in May. Spanish bank bad loan ratio approached to a record high in November. Akzo Nobel, the largest paint maker fell after 4% decline in quarterly revenues.
European markets traded higher for the second day in a row tracking the gains New York and in Asian markets.
In London, FTSE 100 index jumped 1.2% to 6,648 and in Frankfurt DAX index gained 0.8% to 8,321. In Paris, CAC 40 index added 1.3% to 3,921.
Tech stocks across Europe were lower after SAP AG in Germany reported lower software sales in the second quarter and cut its revenues outlook. In addition, weakness in Ericsson and in Nokia results also weighed on the market.
Bad Loans Rise at Spanish Banks
Non-performing loans at Spanish banks rose closer to last year’s record high as the nation remains stuck in economic decline.
The Bank of Spain reported doubtful loans held by banks and financial institutions increased to 170.23 billion euros or 1.21% of all loans and bad loan ratio increased near the record high of 11.23% reached in November last year.
In addition, to total loan loans decreased 12.7%to 1,519.18 billion in May, as the demand for loan fell sharply and the economy shrinks.
Only a month ago, Spanish government data showed April mortgage loans fell 17.5% in April from a year ago and residential loans dropped 18.1%.
Italian Construction Slump Weakens
Italian construction output declined 15.2% in May after falling 10.6% in April, the Italian National Institute of Statistics said today.
The decline in construction activities deepened after activities fell and bank lending remained constricted in the month.
IMF Urges UK to Rebalance Economy
IMF in its annual UK economic assessment urged the government to rebalance economy and noted that the economic recovery remains “slow and fragile.”
While the multi-lateral agency noted the government’s efforts to reduce fiscal risk and ensure the sustainability of public debt but a number of members of committee said slow growth could undermine the credibility of the fiscal and monetary efforts.
Current Account Surplus in Euro Zone Falls
Euro zone current account surplus declined in May from the previous month on the higher deficits in current transfers and a decline in revenues, the European Central Bank said today.
The seasonally adjusted current account surplus declined to 19.6 billion euros from the revised higher 23.8 billion euros in April.
Stocks in Review
Akzo Nobel NV dropped 8% after the largest paint maker in Europe reported 14% fall in second quarter operating earnings to 474 million euros. Sales declined 4% to 3.87 billion euros.