LONDON (ShareCast) - -Markets up on strong US retail sales
-Spanish debt fears persist
-GDF Suez pays 6.4bn for International Power stake

European markets were broadly in the black after a strong performance from utilities outweighed worries over the banking sector.

Spanish 10 year bond yields rose to over 6% as the Prime Minister, Mariano Rajoy reiterated the gravity of his country’s position saying the “fundamental objective at the moment is to reduce the deficit...If we don’t achieve this, the rest won’t matter: we won’t be able to fund our debt.”

American retail sales rose 0.8% in March, significantly better than expected, and following an upwardly revised gain of 1% in February.

COMPANIES

Amongst the biggest risers in Paris was the utilities giant, GDF Suez (+2.9%) which announced it had agreed to buy the 30% of British group, International Power, which it does not already own. The transaction will cost around £6.4bn but will see GDF raise its 2012 full year targets.

Dutch mobile phone firm KPN rose 1% on news it is reviewing its Belgian operation BASE with a view to a possible sale.

French drinks firm Pernod-Ricard rose 1.6% after receiving an upgrade from analysts at Morgan Stanley.

BNP Paribas (-4.6%), Credit Agricole (-4.4%) and Societe Generale (-4%) all fell on concerns the French socialist presidential candidate, Francois Hollande, may beat Nicolas Sarkozy. The market is worried he may have to borrow more money to deliver on his election promises.

The leading sectors on the benchmark Stoxx 600 were chemicals (+1.66%), automobiles and parts (+1.56%) and health care (+1.36%). Unsurprisingly banks were the worst performers, down 0.89%.

OTHER MARKETS

Front month Brent crude futures contracts dropped 2.13% by 16:46 London time to hit $118.63 by barrel.

The euro had fallen 0.08% against the dollar by 16:59 in London, to sit at $1.3067

BS

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