Business News & Financial News

European stock markets closed sharply higher Friday, praising the employment figures significantly better than expected in the U.S. in January and other U.S. statistics considered encouraging for e global economy.

The CAC 40 index ended for the first time above 3,400 points since early August, with a gain of 1.52% to 3427.92 points. For the week, the benchmark index of the Paris took 3.29%.

The London Stock Exchange has sold for 1.81%, 1.67% that of Frankfurt and Milan up 1%. The pan-European STOXX index rose 1.49% 50a.

Concerns about the apparent lack of progress on the Greek case, however, have plunged the Athens Stock Exchange.

"After a month of January for significant investors, European stock markets continued their advance (…) the announcement of a fall in unemployment in the United States to its lowest level in three years (8.3%) and an imminent agreement on Greece maintain the euphoria on global indices, "said Fabrice Cousté, CEO of CMC Markets France. 

The upturn in the U.S. employment continued in January, with the highest rate of job creation observed in nine months, and the unemployment rate fell to , its lowest level in nearly three years, reflecting the impact of growth in the fourth quarter of 2011 at the beginning of new year.

The growth rate of services sector in the U.S. has in turn greatly accelerated in January, while economists had estimated that it would evolve in the ME I beat that in December, according to figures released by the Institute of Supply Management (ISM). 

In addition, orders to U.S. industry rose for the second consecutive month in December, driven by increased business investment, and the rate of growth of the sector services has increased significantly in January.

The Government will meet throughout the weekend to decide on a new set of anti-deficit. The announcement will probably be Monday at the end of an extraordinary cabinet meeting. Minister of Economy and Finance, Baroin, and budget minister, Valérie Pécresse (here on the benches of the National Assembly on 6 September 2011)

The government will hold meetings arbitration throughout the weekend before the announcement, probably Monday, a new set of anti-deficit measures which a light could be a new day of solidarity, has said on Saturday a government source. "Conciliation meetings will be held the weekend before the ads are likely to take place Monday even if it is not yet confirmed," it was said the same source.Announcement of details of the measures occurring after a cabinet meeting postponed to Monday exceptionally due to preparation of the G-20 summit last Wednesday.

According to reports in the Journal du Dimanche, a government source confirmed a second day of solidarity is under consideration. Founded in 2004 after the 2003 heat wave, the first Solidarity Day is a day of unpaid work whose fruits fund the care of elderly and disabled. Originally set for Monday of Pentecost, that day, which reported 2.4 billion euros in 2010, has since 2008 organized "a la carte".

Other measures to be announced Monday include the raising of the reduced VAT rate, from 5.5% to 7% for the restoration and renovation of housing.

European shares were down sharply in early trade, including sealed by the decision of the Greek Prime Minister to submit to referendum the agreement on the resolution of the crisis of sovereign debt in the eurozone.

"The risk is that a 'no' to the Greeks do completely derail the rescue efforts. With a vote expected in January, I can truly say goodbye to the rally of the season," said a trader based in Paris.

The Euro Stoxx 50 index of volatility, a "barometer of fear" in the financial markets, jumped 20% in opening sign of the strong concern room.

In Paris the CAC 40 fell 3.3% to 9:40, passing below the 3200 to 3135 points, weighed by banks.

List of values ​​to follow on Wednesday at the Paris Bourse.

* BANKS. The International Monetary Fund is considering taking part in a special investment vehicle that would be created by the European Financial Stability (EFSF) but has not yet taken any decision, officials said Tuesday the euro area.

* PSA Peugeot Citroën has revised down its forecast Wednesday after the third quarter of 2011 marked by lower volumes and increased competition on prices in Europe.

* AIR LIQUIDE confirmed target improvement in net profit in 2011 "in a normal environment," despite a slowdown in sales growth in the third quarter, still worn by the emerging markets.

* Bouygues.Morgan Stanley initiated coverage of the value with a board underweight and a target price of 32 euros.

* Saint-Gobain confirmed its 2011 objectives despite the deterioration in economic conditions which could lead to slower growth in the fourth quarter of the group.

* STMicroelectronics.Kepler Capital Markets lowered its recommendation on the way to reduce, retain cons.

* Ingenico found that the turbulence in the economy does not question its forecast for 2011, thanks to particularly strong sales growth in emerging countries and Europe, but the manufacturer of payment terminals has remained silent of 2012.

* MERSEN confirmed its 2011 objectives, supported by strong solar activities and Asia, but expressed cautious for 2012 due to economic climate remains uncertain.

* LAFUMA confirmed its performance targets for 2010-2011 following a growth of 1.7% of its turnover in respect of the fiscal year.

European banks need a hundred billion of fresh capital to strengthen their balance sheet and address the current turmoil, said Thursday the Austrian Minister of Finance, Maria Fekter.

The issue of recapitalization of banks is a major enrolled in the agenda of the EU summit scheduled for Sunday, expected to make a comprehensive response to the debt crisis.

"Thank God it's not as high as suggested by the media.What is needed for the recapitalization is about 100 billion (euros), "said Maria Fekter at a conference.

Banking sources and the European Union had earlier told Reuters it would take 90 to 100 billion euros to recapitalize banks in the EU.

This amount, which is the subject of an agreement on the part of Twenty-Seven, should cover about sixty of the largest banks in the EU, the sources said.

"The amount was discussed by member states, it is now acceptable for everyone," said a source told Reuters the EU.

"The amount could exceed 90 billion euros," said a banking source.

The envelope must be added to the 50 billion already raised by European banks over the period from January to April and the funds raised on the market for which the sum is not yet precisely known.

Sovereign debt valued in "MARK TO MARKET"

It takes into account a requirement of capital adequacy ratio "core tier one" of 9% and retains the same definition of this ratio as that used in the last series of stress tests in July, despite protests from some countries.

Germany will for example not allowed to consider in its bank holdings "silent" they hold in other institutions and, in the same way, Spain will not recognize additional reserves of capital that Bank of Spain requires national banks.

As expected, the amount also takes into account a value to market value of sovereign debt held by banks.

This exercise of "mark to market" will cover not only the securities issued by the peripheral countries of the euro area but also those known as the center, who sometimes treat the secondary market at above face value, as the case for German Bunds.

"There is no reason that we inflicted only the negative aspects of this exercise without taking into account the positive aspects," said one source, but said it would have a positive impact on the envelope eventually required for such recapitalization.

This amount must now be discussed by finance ministers and between heads of state and government of the euro area and EU, who meet from Friday to Sunday in Brussels.

The Securities and Exchange Commission (SEC) has opened a broad investigation into index funds (ETF) to ensure they are sufficiently transparent and do not feed market volatility, said Wednesday a leader of the U.S. stock policeman .

"The Commission staff are conducting a general review of index funds including on the sufficiency of the information provided to investors, the levels of liquidity and transparency of the underlying instruments in which the index products (FTE) invest, the accuracy valuations, the effectiveness of arbitration and the relationship between market volatility and FTEs, "said Eileen Rominger, Director of the Division of Investment Management at the SEC.

According to the text of a planned intervention Wednesday before members of Congress, the official stressed that the survey also aims to "gather and analyze detailed data on specific products."

This assessment is the second SEC investigation related to investment companies, after the commission decided in August to gather opinions on the potential risks of the use of derivatives by mutual funds ("mutual funds' ), ETFs and other structured funds.

ETFs, such as those managed by BlackRock, State Street and Vanguard Group, are financial products reproducing the weighting of an index and therefore its performance.Since their introduction in the 1990s, they took off to about 1,000 billion in assets (724.7 billion euros).

However, certain types of incidents and some ETF market, as the "flash crash" ('flash crash') of 6 May 2010, have fueled concerns of regulators, who fear that these index funds do not contribute to volatility markets and pose problems for the less informed investors.

During the 'flash crash', for example, ETFs have experienced massive changes in the meeting and represented 70% of aborted transactions.This incident prompted the SEC and stock exchange operators to set up a system of "circuit breaker".

The SEC also began to focus on leveraged ETF, used to multiply the gains, ETF and reversed, that achieve the performance opposite to that of the underlying index.

France should maintain its valuable credit rating "AAA" Despite the security which would make Paris a portion of the bond portfolio of troubled bank Dexia and a possible capital injection into banks, analysts said a Reuters poll .

They point out that this type of guarantee, recorded as an off-balance in the public accounts, and a possible capital investment banks, which could eventually generate a profit, do not pose a risk to the sovereign debt.

But the rescue of Dexia, which should be formalized on Sunday, and a new injection of public funds in other banks will form a new constraint on the flexibilities of the French government, which announced a few weeks ago to 12 billion euros of savings in order to preserve the triple "A" credit rating the highest possible.

Analysts point out however they can not confirm their hypothesis that once the details of the dismantling of Dexia are known.

The Belgian, French and Luxembourg reaffirmed Sunday after a meeting held at midday in Brussels their solidarity in the search for a solution that ensures the future of Franco-Belgian bank.

In a joint statement, the Belgian Prime Minister Yves Leterme and French François Fillon stated that the three governments give their full support to the proposals of management of the banking group, presented at a Board of Directors scheduled to begin at 15:00 in Brussels.

The activities of the Franco-Belgian bank, first bank in size in Europe to be a victim of the crisis of sovereign debt in the euro zone could be split and the most risky assets confined to a separate structure.

Brussels and Paris are trying to agree on the guarantees afforded by the two countries to the hive to accommodate the bond portfolio of 95 billion euros in Dexia, hoping not to aggravate the situation of public finances .

The rating agency Moody's has also increased pressure on the Belgian camp Friday night: it has placed the sovereign rating of Aa1 by explaining kingdom under surveillance will include assessing the costs and liabilities that the state could play in supporting Dexia.

Standard & Poor's lowered Tuesday its economic growth forecasts for the eurozone to 1.7% this year and 1.5% for 2012 and believes that a relapse into recession can be avoided even if the risks are increasing .

The rating agency expects that the European Central Bank (ECB) is not interest rates before the end of first quarter 2012 and that the Bank of England keeps rate at 0.5% until the second half of 2012 to meet the 1% by the end of next year.

S & P planned to date for euro zone growth of 1.9% in 2011 and 1.8% in 2012.

"We continue to believe that a true 'double dip' ('double dip') will be avoided by maintaining sources of growth, although we recognize that downside risks are significant," writes Jean-Michel Six, an economist for Europe S & P "In particular, we will closely monitor the evolution of consumer demand over the coming quarters."

For its part, the International Monetary Fund next month should lower its growth forecasts, reported Monday the Italian news agency Ansa.For the eurozone, the IMF expects more than 1.9% of GDP growth in 2011 and 1.4% in 2012.

The S & P forecast for Germany is reduced to 2% in 2012 instead of 2.5%, and for France to 1.7% in 2011 and 2012 instead of 2.0% and 1.9% respectively .

The French government has lowered its forecast last week to 1.75% in 2011 as announced in 2012 and 12 billion euros in measures of income and savings to reduce its public deficit in the agreed proportion.

According to S & P, the British economy should grow by 1.3% in 2011 and 1.8% in 2012 (instead of 1.5% and 2.0%) and the Spanish economy by 1.0% in 2012 to instead of 1.5%.

The President of the European Central Bank Jean-Claude Trichet reiterated over the weekend of the ECB's commitment to price stability, which it considers "essential" to promote growth.

These words, delivered Saturday at the annual meetings of Jackson Hole (Wyoming), have followed a remarkable response from the Executive Director of the International Monetary Fund (IMF) Christine Lagarde, who has warned against the risk of the global economy plunging into recession and called for a rapid and coordinated political action, particularly through a recapitalization of banks.

"We believe that the very solid anchoring of inflation expectations is our one of our major assets," said Jean Claude Trichet, who did not mention in his address the crisis of sovereign debt in the euro zone or prospects for the policy of the ECB.

"This is something we consider absolutely essential to trust," he added, saying that confidence was useful in a difficult environment to help maintain growth.

The European Central Bank will adjust its monetary policy unconventional specific problems it faces, said the head of the institution in Frankfurt.

"The use of unconventional measures depends on the operation of the transmission of monetary policy and must be proportionate to the level of malfunction or interruption of money and capital markets or market segments," he said.

Jean-Claude Trichet echoed the comments of Christine Lagarde, that the upheavals of the political process in Europe increases the uncertainty.

"Paradoxically, we – as a group, as a whole – are not necessarily being in trouble because our fundamentals are very bad. Our fundamentals are very bad.The problem is that we have created difficulties in our governance, "he said.

"SLOWDOWN DOES NOT MEAN RECESSION"

Austria's Ewald Nowotny, a member of the Governing Council of the ECB and also present in Jackson Hole, said in turn that there was no reason to believe that inflation expectations had increased.

"What we see is that inflation expectations are stable," he told news agency Bloomberg.

"At the moment, when I look at oil prices and demand, I see no specific problem that could contribute to an increase in inflation expectations."

These comments suggest that the ECB has a mandate to keep inflation just below 2%, could keep its rates unchanged after two successive increases this year.

To the Governor of the Austrian National Bank, "the prospect of growth is intact" in the euro area and provide a solid foundation for next year.

"Even if there is a slowdown, it does not mean that there is recession," he said to Bloomberg, saying not to believe that the interbank lending market was moving towards paralysis, as in 2008 after Lehman Brothers.

"We should not overstate the situation (…) We are far from a situation like after Lehman.It's something to watch, but not an immediate challenge. "

Earlier this month, Ewald Nowotny was found that the surge in bank deposits with the European Central Bank was worrying, but warned that the economic situation in the euro area had not changed overnight.

Most Gulf stock markets have closed lower Sunday, both penalized by the lowering by Standard & Poor's rating of the U.S. and the new onset of fever on the forehead of the debt of countries in the euro area.

S & P on Friday denied the United States in their triple A, lowering the rating of sovereign debt to AA +, sowing panic among investors.

Saudi Stock Exchange, the largest in the Arab world, has faltered on Saturday, falling from 5.5% to a low of five months before showing a small increase of 0.08% at the end of Sunday.

In Oman, the main index lost 1.9% to a low of two years, while Bahrain has given up 0.33% and that of Abu Dhabi has dropped 2.5%.

A Kuwait City Stock Exchange fell by 1.6%.In Qatar, it was down 2.5%.

But it was in Tel Aviv that the decline was most pronounced with a fall of 6.99% recorded by the TA-25 index in Israel. The TA-100, wider, has meanwhile shrunk by 7.2%.

He also had to wait nearly an hour to attend the first exchanges in the financial center of Israel, the circuit breaker having switched on while the stock market already lost more than 5% in pre-market.

Israeli investors are concerned that the U.S. debt crisis is out of control and then it is translated by a dive into recession the world's largest economy, said Zach Herzog Psagot Brokerage.

"The Israeli economy will not put a dive of the United States into recession.We are dependent on exports of goods and services, "he told Reuters, noting that exports account for 45% of the GDP of Israel and for two-thirds they go to the United States and Europe.