Key European stocks rise; euro dips to $1.3076

December 06, 2012 - 2:36:05 am

LONDON: European stock markets rose yesterday, unruffled by grim news on the eurozone and British economies. 

London’s FTSE 100 index of leading companies closed up 0.39 percent to 5,892.08 points, while Frankfurt’s DAX 30 added 0.26 percent to 7,454.55 points, and in Paris the CAC 40 climbed 0.28 percent to 3,590.50 points.

In foreign exchange deals, the euro dipped to $1.3076 from $1.3096 late in New York on Tuesday. Gold prices eased lower to $1,694 an ounce on the London Bullion Market, from $1,697.75 on Tuesday.

The eurozone Purchasing Managers Index (PMI), a leading indicator compiled by the London-based Markit research firm, showed a upwardly revised score of 46.5 points for November.

Markit said the figure suggested the eurozone might be past the worst of its economic downturn, although recession was likely to continue into the beginning of next year.

Data from the European Union’s statistics agency Eurostat showed retail sales fell by 1.2 percent in October from September, the third straight monthly decline and the largest since April.

Retail sales fell by 3.6 percent compared with October 2011, marking the largest year-to-year drop since May 2009.

In New York, US stocks traded with investors tracking talks on avoiding the so-called fiscal cliff of automatic tax hikes and spending cuts due to come into force on January 1.  In midday trade, the Dow Jones Industrial Average was up 0.87 percent while the S&P 500-stock index had risen 0.44 percent.  The tech-rich Nasdaq Composite had slid 0.35 percent, weighed down by market chatter about Apple’s profit outlook sent the company’s shares down 4.6 percent.

Before the opening bell, payrolls firm ADP reported that US businesses added just 118,000 jobs in November, down from 157,000 in October. A key report on the US economy’s huge services sector showed improvement. The Institute for Supply Management’s monthly index rose to 54.7, from 54.2 in October, roughly in the range it has held for a year.

In London, Britain’s finance minister George Osborne updated his budget plans and released revised government growth and debt forecasts. He warned that the economy was expected to contract by 0.1 percent this year.

In Asia meanwhile, stock markets closed higher on hopes for progress in talks in Washington aimed at avoiding a “fiscal cliff” of tax hikes and spending cuts.

Chinese shares bounced back from four-year lows, also on speculation that the country’s government would soon unveil new plans for the economy, while data showing Australian growth remained buoyant provided some support.

In company activity, shares in HSBC rose 1.24 percent to 644.1 pence after the British banking giant said it would sell its stake in China’s second largest life insurer Ping An to a Thai firm for $9.4bn.

Britain’s biggest retailer Tesco rallied 3.31 percent to 337.45 pence as the supermarket group said it would likely exit its loss-making US business. AFP