Slow Activity Ahead of Slovakia Vote

Eagle River, WI 10/11/2011 (PennyPayDay) – Shares remain in the doldrums ahead of today's vote in Slovakia on sanctioning the country's commitment to a beefed-up version of the European Financial Stability Facility (EFSF).

Slovakia is the only country in the 17-member Eurozone yet to ratify the retooled EFSF, and there is considerable doubt whether the vote will go the government's way today, with the country's largest opposition party pledging to vote against it, after Prime Minister Iveta Radicova turned the motion into a vote of confidence on her government.

Radicova's gambit was seen as an attempt to persuade recalcitrant members of the governing coalition to vote in favour of the motion. Specifically, the liberal Freedom and Solidarity (SaS) party has said it would not vote in favour of the motion because it wants the country, one of the poorest in the Eurozone region, to have a veto over future pay-outs from the bailout fund.

The Euro Stoxx 50 is off 22 points at 2,298, the CAC in Paris is 21 points weaker at 3,140 while the DAX in Frankfurt is down 46 at 5,801.

There is not much corporate news flow to focus on today. Spanish bank Banco Espanol de Credit is in the red, after third quarter profits dived 83% from last year, as it upped provisions for bad debts.

Satellite navigation specialist TomTom is heading north after it announced a deal with the Ford Motor Company to integrate its devices into some of Ford's European models.

Investment analysts at brokers and investment banks have not taken a break from their scribbling, just because markets are becalmed.

Spanish utility company Iberdrola has been downgraded by Goldman Sachs to "neutral".

The US bank has also downgraded German retailer Metro, from "buy" to "neutral", in the wake of yesterday's announcement from Metro's boss, Eckhard Cordes, that he would not seek to have his contract extended when it expires next year.

German bank Baader Bank, however, thinks the market will welcome the decision as "in its view, he promised a lot and did not deliver."

Ophthalmic lenses maker Essilor is off the pace in Paris after Morgan Stanley shifted its stance to "underweight" from "equal weight".

German airline Deutsche Lufthansa gets the downgrade treatment from Bank of America Merrill Lynch, which now rate the stock at "under-perform", having previously rated it a "buy".

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