European Market Overview July 6th 2011

  • European stocks were little changed, after the benchmark Stoxx Europe 600 Indexposted its six days of gains.
  • Celesio AG, Europe’s biggest drug wholesaler, surged 2.8 percent after analystsraised their recommendation on the stock.
  • CSM NV slumped more than 7 percent, its largest drop in 2 1/2 years, after sayingfirst-half earnings will decline because of higher raw-material costs.
  • The Stoxx 600 climbed less than 0.1 percent to 275.62 at the 4:30 p.m. close inLondon as more than half its companies retreated. The index surged 4.4 percentduring the previous six trading days after Greek lawmakers passed a five-yearausterity package, qualifying the country for further aid.
  • National benchmark indexes fell in 15 of the 18 western European markets. France’sCAC 40 Index decreased 0.6 percent, the U.K.’s FTSE 100 Index rose 0.1 percent andGermany’s DAX Index retreated 0.1 percent.
  • Moody’s Investors Service downgrade of Portugal’s debt to junk to Ba2 from Baa1making it the second euro-region country with a non-investment-grade rating.
  • Asian shares retreated as Moody’s Investors Service said that Chinese banks haveover lent to local governments by more than the national auditor had estimated.China may have understated its debt of local governments by Rmb3,500bn ($541bn),a hole in public finances that is likely to inflict damage on banks. Moody’s last yearupgraded China’s sovereign rating, said it believed that the audit may have missed abig chunk of highly problematic loans that were not properly underwritten and socould not be strictly classified as government obligations.
  • Temasek, the Singapore state-owned investment company, is selling its shares in twoof China’s biggest banks to raise as much as $3.6bn, the financial times reported. Itis selling US$2.4bn of shares in Bank of China and about US$1.2bn in ChinaConstruction Bank as part of a planned consolidation of Temasek’s portfolio ofChinese banks.
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