German economy 'loses momentum' as unemployment figure rises to 6.8pc
STOCK markets around Europe opened their doors again yesterday following the May Day holiday, but traders were greeted with worse than expected news from Germany.
German unemployment numbers rose unexpectedly in April by 19,000, bringing the country's total ranks of jobless to 2.87 million and the rate to 6.8pc.
Economists had broadly expected a decline of 10,000 in the figure. Overall EU unemployment rose to 10.9pc in March from 10.8pc in February.
The head of the Germany's Federal Labour Agency said that the "positive trend" of the EU's biggest economy remains intact, but that the economy has "lost momentum".
Other data showed that euro-area manufacturing contracted for the ninth month in a row in April and by a wider margin than expected. The PMI for the region fell to 45.9 from 47.7 in March.
"Manufacturing in the euro zone took a further lurch into a new recession in April, with the PMI suggesting that output fell at a worryingly steep quarterly rate of over 2pc," chief economist Chris Williamson at research group Markit said.
At the open, European markets were mixed, with France's CAC 40 having jumped 1.2pc and Germany's Dax up 0.75pc. But by mid-afternoon those gains had been erased as markets hit reverse gear.
In Ireland, the ISEQ Overall Index was one of the European markets that opened higher and was under pressure later, barely staying above the water line by the afternoon. By the day's end, it had dipped very slightly into the red, closing down 2.93 points, or just shy of 0.1pc, at 3,258.62.
Packaging group Smurfit Kappa, which releases first- quarter results tomorrow, failed to hang on to earlier gains of as much as 2.6pc. It closed up just 0.3pc, or 2 cent, at €6.47.
Shares in Aer Lingus, which releases first-quarter results this morning, failed to hang on to all the gains made on Tuesday after Etihad confirmed it has acquired almost 3pc of the Irish airline. The stock declined 1.8pc, or 1.8 cent, to 97.5 cent.
Ryanair did better, with its shares rising 1.6pc, or seven cent, to €4.42. The stock has gained over 26pc in the past year. Shares in food group Aryzta added 3.4pc to €39, while Fyffes rose 4.2pc to 47 cent.
Bank of Ireland shares sank nearly 3.6pc to 10.8 cent, while Kenmare Resources yielded 3.8pc to 64 cent.
National benchmark indices fell in 15 of the 18 western European markets today. France's CAC 40 rose 0.4pc, the UK's FTSE 100 slid 0.9pc and Germany's DAX retreated 0.8pc. Spain's IBEX 35 Index dropped 2.6pc to 6,831.90, its lowest level since March 2009.
UBS rose 3.7pc to 11.75 Swiss francs after the lender attracted more funds from wealthy clients in the first quarter than analysts estimated. UBS said its wealth-management units attracted 10.9bn Swiss francs (€9bn) in net new funds, more than the 8.8bn-franc estimate of analysts surveyed by Bloomberg.
STMicroelectronics, Europe's biggest semi-conductor maker, gained 1.3pc to €4.34 after Goldman Sachs advised clients to buy the shares and Citigroup said investors should hold them rather than sell.
Home Retail Group, the owner of the Argos and Homebase chains, plunged 13pc to 87.55p after reporting a 60pc fall in annual profit.