European Markets Turn Lower Ahead Of G20 European stocks are trading mostly lower Friday morning amid speculation that additional stimulus measures by central banks will fail to sustain the pace of the economic recovery, with traders turning cautious ahead of the weekend meeting by the finance ministers and central bank governors from the Group of 20 nations in South Korea to discuss reforms to the global economy.
In the commodities market, crude for December delivery is edging up $0.43 to $80.99 a barrel. Yesterday, oil eased after China reported slowdown in growth and the U.S. dollar turned higher.
Meanwhile, the price of gold continued to move down, with gold for December delivery easing $5.30 to $1,320.30 an ounce. Yesterday, gold slumped below $1,330 as risk appetite improved after a batch of strong corporate earnings reports from the U.S. companies.
In economic news from the euro zone, an indicator of German business confidence rose for the fifth month in a row to its highest level in three years. The Ifo Business Climate Index, based on conditions at 7,000 firms across Germany, climbed to 107.6 in October from 106.8 in the previous month. Economists had predicted a score of 106.5. The survey also showed surging optimism for the coming six months. The expectations index rose to 105.1 from 103.9, well above forecasts for a score of 102.9. The current situation index, which is a reflection of the current state of German businesses, rose to 110.2 from 109.8 in September. Analysts had forecast a score of 110.0.
Meanwhile, a leading indicator of the German economy climbed at a slower pace in August than in the previous month. The Conference Board leading index climbed 0.7% from July, when it grew 1.1%. Meanwhile, the coincident index, which is a measure of current economic activity, increased 0.2% in August, boosted by industrial production and manufacturing sales. Revised figure showed that the coincident index stagnated in July.
Latest data from the statistical office Eurostat revealed that no member state of the European Union recorded a government surplus in 2009. The largest government deficits in percentage of GDP were recorded in Ireland and the U.K. In Ireland, the deficit was 14.4% of GDP and that in the UK at 11.4%. The lowest deficit was recorded in Luxembourg, at 0.7% in 2009.
Among stocks, Volvo AB is edging down nearly 1% even after it swung to profit, reporting third-quarter income of SEK 2.85 billion compared with a loss of SEK 2.91 billion in the third quarter of 2009. Earnings per share in the third quarter amounted to SEK 1.38 versus a loss of SEK 1.44 last year.
The world's biggest maker of heat exchangers Alfa Laval AB is slipping over 4% after reporting third quarter sales that missed analysts' estimates.
On the positive side, France's second-largest auto-parts supplier Valeo is gaining over 8% after reporting a 22% jump in third quarter sales and increasing its operating margin guidance.
Mobile wireless networks company Ericsson is adding around 8% after reporting third quarter net income of 3.68 billion kronor, beating analysts' estimates for net income of 3.52 billion kronor. Debutant Betfair Group is up close to 20%.
The FTSE 100 is currently down 0.33%, the CAC 40 is easing 0.03% and the DAX is slipping 0.07%.