LONDON (The Deal) -- Monday's European stock market rally was but a fond memory in early trading this morning, as renewed uncertainty in the Ukraine helped push Germany’s market downwards and the French current account deficit gaped wider as a result of the huge fine French banking giant BNP Paribas (BNPQY) paid to U.S. regulators last month. London drifted aimlessly for want of any real news.
Publication of the latest economic confidence index from Germany’s prestigious ZEW economic research center provided a snapshot of just how bad the country’s businessmen think it will get. The index dropped to 8.6 in August, from 27.1 the previous month -- and well below consensus forecasts of 17. That’s the biggest drop since the middle of 2012, and the lowest measure of economic confidence since December that year.
German glues and consumer goods maker Henkel (HENOY) reported weaker quarterly revenues, although after taking account of currency fluctuations and one-off costs, operating profits were actually up 2.1% at €674 million and well above analysts’ forecasts. But the company lists Ukraine as one of its top-10 markets and also chose to warn of a likely recession in Russia this year. Not surprisingly Henkel was down 2.46% at €69.50 and the biggest faller in the DAX.In London, scandal-hit outsourced services group Serco (SECCY) recorded poor first-half results, with a pretax loss of £7.3 million compared with a profit of £106.1 million a year ago. But the company maintained its forward guidance and proposed a dividend -- and its share was one of the biggest risers, up 4.53% at 343.8 pence. Meanwhile, across Europe, airline stocks are lifting off, as oil prices slip back. Lufthansa (DLAKY) was up 1.69% at €12.91, while in London, International Consolidated Airlines (ICAGY), which operates both British Airways and Spain’s Iberia, was up 1.06% at 334.70 pence. Read More: The Keystone XL Pipeline Springs Another Leak The FTSE 100 was up 0.08% at 10.50 a.m. BST at 6,638, while in Frankfurt, the DAX was down 0.25% at 9,157.85 and in Paris, the CAC 40 was down 0.2% at 4,189. Moscow’s MICEX index was up 0.39% at 1,377.84. Asian bourses continued Monday’s rally overnight, though at a slower pace. Hong Kong’s Hang Seng was up 0.18% at 24,689.41, while in Tokyo, the Nikkei 225 was up 0.2% at 15,161.31, although China’s Shanghai Composite was down 0.14% at 2,221.59.