July 26, 2012
European stock markets mostly rose on Wednesday after suffering stiff losses early in the week, as gloomy economic news was offset by upbeat earnings statements by European blue-chips, analysts said.
London's benchmark FTSE 100 index closed essentially unchanged at 5498.32 points despite news that Britain's recession deepened substantially in the second quarter of 2012.
British gross domestic product slumped by a worse-than-expected 0.7 per cent in the three months to June, according to official data published just ahead of the London Olympics.
Elsewhere, the Paris CAC 40 gained 0.23 per cent to 3081.74 points and Frankfurt's DAX 30 rose by 0.25 per cent to 6406.52 points as investors set aside news of sliding German investor confidence.
Italian and Spanish markets rebounded, clawing back some of their recent losses suffered on eurozone debt crisis concerns. Milan jumped 1.17 per cent and Madrid added 0.82 per cent.
"Earnings from leading European blue-chips have helped the positive bias today, with auto stocks outperforming the wider market," at least in Germany, ETX Capital Market analyst Ishaq Siddiqi wrote.
Some gains were also noticed after Austrian central bank governor Ewald Nowotny, a member of the European Central Bank governing council, said that the future European Union financial rescue fund might be granted a banking licence.
That would allow the fund to exchange bonds for ECB cash, bolstering its capacity without governments having to contribute additional funds.
In foreign exchange deals, the euro climbed to $US1.2127 from $US1.2063 in New York late Tuesday, when it had tumbled to a two-year low at $US1.2043.
Many US stocks slipped lower on Wall Street in midday trading however as investors digested strong earnings reports from Dow members Boeing and Caterpillar along with disappointing results from Apple.
Weaker-than-expected numbers on new-home sales also weighed on sentiment.
The Dow Jones Industrial Average of 30 blue-chip stocks was up 0.33 per cent at 12,658.68 points, but the S&P 500-stock index fell 0.26 per cent to 1334.79 and the tech-rich Nasdaq dropped 0.47 per cent to 2849.57.
"The US equity markets are mostly lower in late-morning action in the wake of a disappointing read on new-home sales in the US and as Apple Inc reported second quarter results that missed analysts' forecasts," Charles Schwab & Co analysts said.
Asian stock markets had already closed lower on Wednesday as investors played catch-up with Tuesday's poor European and US performances amid growing fears Spain would need a full bailout.
Tokyo closed down 1.44 per cent, Seoul fell 1.37 per cent and Sydney lost 0.23 per cent. Hong Kong retreated 0.14 per cent and Shanghai dipped 0.49 per cent as tech stocks were hit by Apple's results.
AFP