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Market Update

European Retail Sales Drop and Output Index Declines

Author: Nigel Thomas
Last Update: 9:46 AM ET May 06 2013

3:40 PM Frankfurt – European markets retreated from five-year highs after retail sales fell and a private survey of factory and service sector showed a decline in output. Linde AG jumped to a 2-decade high on better than expected earnings. Statoil faces higher taxes from Norwegian government.

European market indexes declined from the 5-year highs after retail sales fell and service and manufacturing sector output shrank for the fifteenth month in a row.

In Frankfurt trading, the DAX 30 index traded flat and in Paris the CAC 40 index declined 6.1 or 0.2% to 3,907.

Markets in UK, Ireland and Greece were closed for public holidays.

Retail sales in the euro zone decreased 0.1% in March after a revised 0.2% fall in February, according to Luxembourg based eurostat.

A composite survey of factory and services output of purchasing managers showed the index declined to 46.9 in April from 46.5 in March, according to a private economic data provider Markit Economics.

Wolfgang Schaeuble, German Finance Minister said France and Spain have “some flexibility” in meeting their deficit targets, Bild am Sonntag newspaper reported.

The statement prompted French Finance Minister Pierre Moscovici that France has more wiggle room to focus on economic stimulus. Moscovici said on Europe 1 radio, “Austerity on its own restrains growth.”

Stocks in Review

Air France-KLM Group extended loss for the second day in a row by 4% after the largest European airline reported a loss on May 3.

Linde AG soared 4% to 148.19 euros after the Germany based industrial gas maker reported operating profit increased 13% to 953 million euros in the first quarter on the back of the recent acquisition of Lincare Holdings inc.

Statoil ASA declined 1% to NKK136.55 after the Norwegian state controlled oil explorer said the government plans to increase taxes by NKK3 billion or $515 million.

Veolia Environnement SA dropped 1% to 10.56 euros on a media speculation that the largest European water company may buy a 50% stake in Proactiva, Latin American unit of Fomento de Construcciones & Contratas SA.

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