Euro ends mixed

Wed, 14 May 2008

European stock exchanges turned in a mixed performance on Tuesday, with London in decline while Paris and Frankfurt advanced on better-than-expected data on US retail sales.

The London FTSE 100 index shed 0.14 percent to finish at 6211.90. But in Paris the Cac 40 rose 0.45 percent to 4998.67 and in Frankfurt the Dax added 0.34 percent to end the session at 7060.19.

The Euro Stoxx 50 index of leading eurozone shares gained 0.11 percent to close at 3817.07.

US stocks pulled back on economic jitters and a cautious outlook from retail giant Wal-Mart and despite the generally positive retail sales report.

The Dow Jones Industrial Average fell 0.58 percent to 12 802.22 at mid-day, when the tech-rich Nasdaq composite had shed 0.26 percent to 2482.04.

The Commerce Department reported US retail sales declined 0.2 percent in April, in line with market expectations.

But core retail sales, which strip out auto sales, jumped 0.5 percent, widely topping market estimates of 0.2 percent and the strongest gain since January.

The report indicated surprising strength in underlying consumer spending, the main driver of the economy, despite a severe housing slump, rising inflation and tighter credit, analysts said.

"The consumer is alive and kicking despite all of the alarmist reports about his/her death due to rising food and energy costs. This is an encouraging report that defies the talk about the economy being in recession," said Patrick O'Hare, analyst at Briefing.com.

But the US report failed to move investors in London, where the banking sector weighed on sentiment.

Alliance and Leicester was the day's big loser, giving up 10.14 percent to close at 458.75 pence after announcing asset writedowns of £192-million in the first four months of the year compared with 185-million for all of 2007.

Elsewhere in the banking sector, HBOS fell 4.06 percent to 485 pence and Barclays gave up 1.57 percent to close at 437.75.

Banks were also under pressure in Paris. Credit Agricole shed 5.64 percent to close at 19.56 euros after disclosing writedowns of €3.3-billion and a planned capital increase of €5.9-billion.

Retailer Carrefour rose 2.55 percent to 46.25 euros after announcing a change in the leadership of its supervisory board.

Aerospace group EADS fell 0.13 percent to 15.72 euros as its aircraft manufacturing unit Airbus revealed fresh delivery delays for the A380 superjumbo.

In Frankfurt truck maker Man added 1.10 percent to reach 96.53 euros on plans to increase output at a joint venture with the Indian group Force Motors.

But steel producer ThyssenKrupp fell 1.96 percent to 44.59 euros ahead of publication on Wednesday of first half results, which are expected to show a sharp decline.

Elsewhere in Europe there were declines of 0.40 percent to 3827.4 on the Bel-20 in Brussels, 0.27 percent to 14 016.4 on the Ibex-35 in Madrid and 0.33 percent to 480.48 on the AEX in Amsterdam.

There were gains of 0.18 percent to 33 805 on the SP/Mib in Milan and 1.26 percent to 7578.32 on the Swiss Market Index.

Japanese share prices soared 1.53 percent on Tuesday, lifted by gains on Wall Street, a drop in crude oil prices and solid earning results from high-tech companies, dealers said.