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Market Update

UK Jobless Claims Decline, Spain Estimates Deficit to Fall to 7%

Author: Barry Randall
Last Update: 11:14 AM ET February 20 2013

4:00 PM Frankfurt – Markets in Europe traded higher but trading volume was weak. Spain estimated budget deficit in 2012 to decline just below 7%, the lowest in four years. UK jobless claims fell more than expected in January.

European markets struggled to find direction today after a mix batch of earnings and worries that Italy may head for a hung parliament after the weekend election.

In London trading, FTSE 100 index gained 0.4% or 25.9 to 6,405 and in Frankfurt, the DAX index up 0.1% or 9.9 to 7,762. In Paris, CAC 40 index slid 0.3% or 12.1 to 3,724.

Spain’s Prime Minister Mariano Rajoy told parliament today 2012 budget deficit excluding the cost of bank bailout is likely to be just below 7%. The deficit has soared to 11% in 2011 and the in 2012 will be the smallest in four years.

Spanish bond yields dropped 6 basis points to 5.14% and 10-year bond yield for Italy increased to 4.41%.

UK jobless claims fell more than estimated in January according to the data released by the Office for National Statistics.

Claims for unemployment declined 12,500 from December to 1.54 million. Total of employed in the work force increased to 29.7 million in the fourth quarter to December, record since the statistics were compiled in 1971.

December claims were revised to a decline of 15,800 from the previous 12,100. Unemployment rate in three months to December increased to 7.8% from 7.7% in the previous three months to November.

Stocks in Review

BHP Billiton plc dropped 2.8% to 2,173.50 pence after the global resource company reported revenue in the half year ending in December dropped 14% to $32.20 billion compared to $37.48 billion in the same period of last year.

Net income plunged 57.8% to $4.24 billion from $10.04 billion from a year ago and diluted earnings per share declined to $79.4 compared to $187.9 from a year ago period.

Credit Agricole SA climbed 3.6% to €7.59 and France based banking group reported revenue in the fourth quarter ending in December declined 23% to €3.37 billion and net loss for the quarter climbed 29.8% to €3.98 billion from the same period of a year ago.

Revenue for the year dropped 15.8% to €16.32 billion and net income slipped 4% to €6.47 billion from a year ago.

Credit Agricole skipped dividend for second year after net loss for the year 2012 jumped to a record €6.47.

France Telecom SA slipped 1.9% to €7.57 after the France based mobile operator reported revenue for the year ending in December slumped 4% to €43.52 billion compared to €45.28 billion in the same period of last year.

Net income tumbled 79% to €820 million from €3.90 billion from a year ago and diluted earnings per share declined to €0.31 compared to €1.46 from a year ago period.

Kabel Deutschland Holding AG increased 2.5% to €69 after the German cable operator plans to increase dividend and building on cable network. Also, sales in the quarter to December increased 8.8% to €464.8 million.

Lafarge SA soared 6% to €49.51 after the world’s largest cement maker reported operating earnings before depreciation increased to €856 million compared to €798 million a year ago.

Rexam Plc soared 5% to 501 pence after the maker of aluminum cans reported pre-tax earnings rose to 418 million pounds in 2012.

RSA Insurance dropped 14% to 116 pence after the largest general insurance in the UK lowered its second half dividend on the recent UK floods and earthquakes in Italy increased the costs.

Royal KPN NV dropped 8% to €2.99, a 11-year low after Mexico based American Movil SAB decided not to increase its stake above 30% in the company.

Swedisn Match AB dropped 8% to 205 kronor after the company reported fourth quarter profit of 787 million kronor. However, the company guided lower operating profits in certain products segments.

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