European stocks edge higher before US growth data

Europe’s main stock markets rose on Friday in cautious trade before publication of crucial US economic growth data and amid stubborn concerns about Greece’s debt crisis, analysts said.

London’s benchmark FTSE 100 index of leading shares added 0.59 percent to 5,176.20 points in late morning deals.

Frankfurt’s DAX 30 won 0.76 percent to 5,582.29 points and in Paris the CAC 40 gained 0.60 percent to 3,710.93.

The DJ Euro Stoxx 50 index of top eurozone shares increased by 0.68 percent to reach 2,755.96 points. In foreign exchange trade, the euro hit a fresh six-month dollar low as worries deepened about the state of European economies in light of Greece’s debt woes, dealers said.

The euro sank to 1.3913 dollars — the lowest point since July 14. It later stood at 1.3965 dollars, down from 1.3966 in New York late on Thursday.

“Some early bargain hunting has been the main theme ... but investors are likely to remain a little cautious as we run up to the US GDP announcement,” said analyst Joshua Raymond at financial spread-betting firm City Index.

“It is the first release of the fourth quarter US GDP and so naturally it will maintain a big focus for investors.

“Considering the jitters that now exist after the last few weeks of heavy equity falls, investors will be looking for a positive figure this afternoon to reaffirm the recovery theme.”

In Asian trade on Friday, Tokyo stocks sank 2.08 percent as investors took their cue from an overnight slump on Wall Street and Toyota shares continued their slide. Wall Street fell hard on Thursday as the tech sector was hammered by a weak forecast from chip maker Qualcomm.

The market also gave a lukewarm response to President Barack Obama’s economic comments in his State of the Union address, where he called for more efforts to create jobs and also ordered caps on spending. The Dow Jones Industrial Average slumped 1.13 percent to finish at 10,120.46 points.

Global equities were rattled on Thursday after international ratings agency Standard & Poor’s said it no longer viewed Britain’s banking system “among the most stable and low-risk” in the world.

“We no longer classify the United Kingdom among the most stable and low-risk banking systems globally,” S&P had said in a report.

“This is due to our view of the country’s weak economic environment, the reputational damage we believe has been experienced by the banking industry, and what we see as the high dependence on state-support programs of a significant proportion of the industry.”

AFP