German Rate Cut Lifts Index
May 04, 2011
The 25-share AEX index ended the day up 5.47 to 564.95. Investors cheered the German Bundesbank's decision to trim its key securities repurchase rate. The Bundesbank allowed its securities repurchase, or repo, rate to be lowered to 3% from 3.30%, well above the 0.05 to 0.20 percentage point cut many analysts had expected. The repo rate is the bank's main instrument for influencing the money market. Meanwhile, stocks in the U.S. moved solidly higher on the strength of a resurgent technology sector. The Dow Jones Industrial Average was up 27 points at the close of trading in Europe. Among actively traded shares in Amsterdam, ING Group, which accounts for 10% of the AEX index weighting, said its six-month net profit rose 28% to 1.51 billion guilders from 1.18 billion guilders. But the company cautioned ''it is not to be expected that the percentage increase in group profit for the first half of 2011 will be equaled in the second half of 2011.'' ING slipped 30 Dutch cents to 53.90 guilders. Aegon climbed 3.10 guilders to settle at 83.40 after the company said its first-half net profit rose 16% to 711 million guilders from 614.7 million guilders a year ago. Transport and shipping company Koninklijke Nedlloyd rose 1.20 guilders to 38.30 after the company said net profit more than doubled in the first half of the year, thanks to an extraordinary gain of 273 million guilders partly from the sale of drilling unit Neddrill. The company noted, however, that net profit excluding items fell 84% to 6 million guilders, while sales increased 2%.
