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Obama Rally Fizzles After German Data Disappoints

CNBC.com
Wednesday, 7 Nov 2012 | 11:34 AM ET

European shares reversed course on Wednesday to close lower, after data showed weak German industrial production. European indexes had rallied in the morning session after U.S. President Barack Obama won re-election.

  Name Price   Change %Change Volume
FTSE
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CAC 40
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DAX
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The pan-European FTSEurofirst 300 Index closed provisionally down 1.4 percent at 1,099.20 points after data on Wednesday showed German industrial output fell more than forecast in September.

Economic advisers in Germany said the economy would grow by just 0.8 percent this year and next. Separately, a report released by the European Commission also weighed on markets showing rowth for 2013 would flatline but would pick up again in 2014.

The German Dax provisionally closed 2 percent lower.

Meanwhile, the Greek Parliament is preparing to vote on a fresh round of austerity measures on Wednesday evening which could determine whether the country receives more financial aid, even as anti-austerity protests continued.

Greek Prime Minister Antonis Samaras has pleaded with politicians to vote for a further 13.5 billion euros ($17.3 billion) of spending cuts including tax increases and pension cuts.

In stocks news, BNP Paribas releasing third-quarter earnings that beat expectations.

Insurance company Axa released third-quarter earnings with shares opening higher, although the firm warned that profit growth through 2015 could fall short of previously announced targets.

Third-quarter results were also announced by OMV, Carlsberg, Telefonica nd Munich Re with all of their shares opening in the black.

Second-half results were released by Alstom, which saw a rise in orders for train contracts; shares were up nearly 4 percent.

Vestas Wind Systems, Holcim, and Randgold Resources all released third-quarter earnings reports or outlooks that disappointed investors.

Shares in retailerBurberry were 1.44 percent higher as the company issued a profit warning. Mining giant Vedanta Resources released interim results pointing to a rise in profits; shares were up 1.24 percent.

Also on Wednesday, activist investor Nelson Peltz acquired a 1 percent stake worth around 300 million euros ($385.8 million) in Danone, the French food group.

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