09 April 2009 17:06

A strong trading statement from US bank Wells Fargo spread a ray of sunshine on the European banking sector, helping key European market indices post a weekly rise for the fifth week in a row.

Deutsche Bank, UBS, Societe Generale BNP Paribas, Banco Santander and Commerzbank all finished in the blue, with sentiment also boosted by Barclays successfully completing its sale of its iShares business.

ING advanced after the Dutch insurance and banking group said it plans raise up to €8bn by selling non-core businesses.

Elsewhere in the sector, the German government has launched a takeover of troubled lender Hypo Real Estate (HRE). It is the first time in more than 60 years that the government is trying to take full control of a German bank.

SoFFin, the body dealing with the country's bailout money, is offering HRE's shareholders €1.39 per share, a 10% premium over the legal minimum offer of €1.26.

Berlin, which last month agreed to take an initial 8.7% stake in HRE, did not give a total value for the offer, but reports suggest the price values the Munich-based group's outstanding shares at €290m.

US investor JC Flowers, which holds about 23.7% in HRE, said it would study the government's offer but hopes to remain a shareholder. Today's news sent HRE shares up more than 15% in Frankfurt trade.

Logoed sportswear maker Adidas sprinted forward on reports that sales in the first two months of the year in Germany had been good.

German household products manufacturer Henkel dropped after reporting a 7% decline in first-quarter organic sales. The Persil washing powder maker said earnings before interest and taxes fell to about €215m compared with €320m last year.

In economic news, the Bank of England has kept interest rates unchanged at 0.5%, bringing to an end a run of cuts that's taken borrowing costs to their lowest in 315 years.

Elsewhere, the Japanese government has unveiled a $154bn economic stimulus package to help steer the country's economy away from a deep recession.


CAC 40 - Risers
ArcelorMittal SA (MT) € 19.25 +8.91%
ST Microelectronics (STM) € 4.62 +7.62%
AXA (CS) € 10.84 +7.17%
Dexia (DEXB) € 2.80 +6.03%

CAC 40 - Fallers
GDF Suez (GSZ) € 23.82 -4.41%
EDF (EDF) € 31.39 -1.71%
Pernod Ricard (RI) € 40.81 -1.29%
Suez Environnement Company (SEV) € 11.90 -1.20%

• Send this story to a friend