1:00 PM Frankfurt The European indexes fell on the ongoing worries in Greece. Spain returned to recession in the first quarter. The International Monetary Fund estimates the Italian economy to contract this year. E.ON agreed to sell its gas transmission company to a consortium for about 3.2 billion.
The European indexes edged lower after fresh parliamentary election in Greece were announced for June 17 that is expected to vote in parties that resist austerity measures to gain larger representation and worries linked to Spain mounted.
In the interim, Panagiotis Pikrammenos, a senior judge was sworn in as head of the caretaker Greek administration yesterday because neither party could agree on an impartial candidate.
The International Monetary Fund said that the Italian economy is expected to contract this year due to strong headwinds from fiscal consolidation, tight financial conditions, and the global slowdown. Economic activity is expected to recover in early 2013, led by a modest pickup in exports and investment.
In Paris trading, the CAC-40 Index declined 5.20 or 0.2% to 3,043.69 and in Frankfurt the DAX Index edged lower 13.54 or 0.2% to 6,371.38.
The yield on Spains benchmark 10-year bonds rose six basis points to 6.38%, and the yield on the 10-year Italian bonds rose two basis points to 6%.
Spain was in focus after the latest economic data showed second quarter of contraction in a row and depositors withdrew from nationalized Bankia SA more than 1 billion or nearly 1% of its deposit base.
Spain Enters Recession
The Spanish economy returned to recession in the first quarter of 2012, final results from the statistics office Ine confirmed today.
The gross domestic product fell 0.3% in the first quarter as estimated in the preliminary report following a similar rate of contraction in the fourth quarter of 2011.
The GDP declined 0.4% in the first quarter from a year ago following a 0.3% expansion in the previous quarter.
E.ON Sells Open Grid Europe
E.ON AG, the German utility agreed to sell Open Grid Europe, its gas transmission company in Germany to a consortium led by Australia-based Macquarie Group Ltd.
The agreed consideration is about 2.9 billion which, including adjustments for pensions and other assets, will result in a purchase price at closing of about 3.2 billion. The transaction is expected to close in the third quarter of 2012.
Gainers & Losers
ABB Ltd fell 1.2% to $16.25 after the Swedish-Swiss power equipment maker completed its acquisition of Thomas & Betts Corp. The deal will broaden ABB''s strategy of expanding its low-voltage portfolio into new geographies, sectors and products.
Aviva plc declined 1.7% to 276.20 pence after the insurance group first quarter reported a 5% drop in quarterly long-term savings sales to £7.5 billion from £7.8 billion in the prior year. General insurance and health net written premiums were level with last year at £2.2 billion.
HSBC Holdings plc dipped 0.9% to 529.40 pence after the bank said it is on track to hit the top end of the savings target of $2.5 billion to $3.5 billion by the end of 2013.
The company integrated four global businesses, generating incremental revenue of $0.5 billion in 2011 and an additional $1.5 billion is expected in the short to medium term.
National Grid plc edged lower 0.1% to 665.13 pence after the electricity and gas utility reported fiscal year 2012 revenue fell 3.6% to £13.83 billion from £14.34 billion a year ago. Total pre-tax profit for the year declined 2.3% to £2.56 billion compared to £2.62 billion last year.