NEW YORK/london: European stock markets closed with mixed results yesterday, as edgy investors reacted to the crash of a Malaysian passenger plane in Ukraine that killed almost 300 people and an Israeli assault in Gaza.
When a volatile week of trading finally wound to a close, London’s benchmark FTSE 100 had gained 0.17 percent on the day to 6,749.45 points. In Frankfurt, the DAX 30 index was 0.35 percent lower at 9,720.02 while the Paris CAC 40 added 0.44 percent to 4,335.31.
Milan’s stock index rose by 0.65 percent, but the index in Madrid gave up 0.15 percent.
Wall Street rose a day after the S&P 500 suffered its worst decline since April 10, while European shares underwent more selling after falling heavily on Thursday. They shed most of the day’s losses to close slightly lower in a late-day surge, and the S&P rallied 1 percent to recoup most of its prior day losses.
A Capital Economics research note said: “The relatively muted market reaction in the financial markets so far to the latest tragic turn in the crisis in Ukraine — as well as the escalation of the conflict in Gaza... might suggest that investor sentiment is largely immune to geopolitical risks.
“But we remain wary. The Ukraine crisis in particular could still unfold in many ways.”
In midday trading in New York, US stocks benefitted from better-than-expected IBM earnings and generally good results from Google. The Dow Jones Industrial Average was up 0.29 percent at 17,025.94.
The broad-based S&P 500 gained 0.40 percent at 1,966.01, while the tech-rich Nasdaq Composite Index climbed 0.57 percent to 4,388.43.
Meanwhile, the IMF warned that the Ukrainian economy was being badly damaged by the crisis there, and said it now expected the economy to shrink by 6.5 percent this year instead of 5.0 percent.
In Paris, IMF chief Christine Lagarde warned that low inflation could damage growth in Europe and urged the European Central Bank to maintain a flexible policy.
The former French economy minister also urged caution over asset prices, which she said could be too high in relation to fundamentals. “Obstinately low inflation can seriously undermine growth,” said Lagarde, who recently hinted that the 3.6 percent global growth forecast for 2014 might have to be trimmed.
The “good news,” Lagarde said, was that “European economies are beginning to emerge from the crisis.”
In Asia, markets had fallen for the most part after the disaster in Ukraine sparked geopolitical tensions. Hong Kong dropped 0.28 percent, Tokyo sank 1.0 percent and Seoul slid 0.07 percent, while Sydney ended 0.17 percent higher.
Airline stocks retreated, led by a slump in already under-pressure Malaysia Airlines as the company faced up to its second major disaster in four months.
Shares in Malaysia Airlines tumbled more than 11 percent on the news, a little more than four months after flight MH370 went missing with hundreds on board in a remote part of the Indian Ocean.
On Thursday, the Malaysian Airlines Boeing 777 smashed into cornfields in a separatist-held region of eastern Ukraine, killing all 298 passengers and crew.
In Paris, shares in Air France-KLM fell by 2.08 percent to 8.59 euros, while Lufthansa’s stock was 1.06 percent lower at 14.45 euros in Frankfurt.
On Friday, US President Barack Obama termed the crash “an outrage of unspeakable proportions”. He added: “Evidence indicates that the plane was shot down by a surface-to-air missile that was launched from an area that is controlled by Russian-backed separatists inside of Ukraine.”
While underscoring that the full picture had yet to emerge, Obama also highlighted that the pro-Russian rebels have in the past downed Ukrainian aircraft.
Many countries in Asia, Europe and the Americas have demanded an independent, unimpeded international inquiry into the crash.
In bond markets, the rate on the benchmark 10-year German Bund stood at 1.155 percent when government debt trades closed, up from 1.149 percent on Thursday.
Oil prices also gained meanwhile, and on London’s Intercontinental Exchange, Brent North Sea crude for delivery in September rose to $107.66 per barrel yesterday from $106.99 for the August contract one week earlier.
On foreign exchange markets, the European single currency slipped to $1.3512, from $1.3525 late Thursday in New York.
The British pound fell to $1.7071 from $1.7100 on Thursday. The euro edged up to 79.15 pence from 79.09 pence. In commodity deals, gold advanced to $1,307.25 per ounce from $1,302.50 on Thursday, when it had spiked by $20 at one stage following the plane crash.Agencies