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European stocks decline as debt worries persist; DAX down 0.42%

Published 10/12/2012, 05:59 AM
Updated 10/12/2012, 06:00 AM
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Investing.com - European stocks fell on Friday, as renewed concerns over global economic growth and the handling of the euro zone's debt crisis overshadowed Thursday's positive U.S. jobless data.

During European morning trade, the EURO STOXX 50 fell 0.30%, France’s CAC 40 declined 0.45%, while Germany’s DAX 30 dropped 0.42%.

Market sentiment had strengthened after the U.S. Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits last week fell by 30,000 to a seasonally adjusted 339,000, compared to expectations for an increase of 1,000 to 370,000.

But concerns over the worsening of the euro zone's debt crisis re-emerged after top economists slashed their growth forecasts for Germany on Thursday, and warned that public support for financial aid for struggling countries was evaporating.

In addition, German finance minister Wolfgang Schauble rebuked the International Monetary Fund's Christine Lagarde's statement that European leaders should ease demands for tighter austerity in peripheral economies.

Financial stocks were broadly higher, despite euro zone concerns, as Deutsche Bank upgraded European lenders ato overweight earlier in the day. Shares in French lenders BNP Paribas and Societe Generale climbed 0.34% and 1.13%, while Germany's Deutsche Bank and Commerzbank advanced 0.45% and 2.28%.

On the downside, Cap Gemini, the world’s second-largest technology consulting company, tumbled 1.65% after rival Infosys Ltd. cut its sales-growth forecast and said higher wages and currency fluctuations will hurt profitability.

Elsewhere, ASML, Europe’s largest chip-equipment maker, lost 1.64% after Advanced Micro Devices, the second-largest maker of processors for personal computers, cut its third-quarter revenue forecast, citing weak demand across all product lines in a challenging economic environment.

In London, FTSE 100 slipped 0.29%.

Financial stocks were mixed, as shares in Lloyds Banking jumped 1.89% and Barclays surged 2.55%, while the Royal Bank of Scotland and HSBC Holdings dropped 0.31% and 0.38% respectively.

Mining companies were also mixed, as shares in Rio Tinto slumped 0.49%, while BHP Billiton edged up 0.06%.

In the U.S., equity markets pointed to a moderately higher open. The Dow Jones Industrial Average futures pointed to a 0.11% rise, S&P 500 futures signaled a 0.17% increase, while the Nasdaq 100 futures indicated a 0.01% gain.

Later in the day, the U.S. was to produce official data on producer price inflation. In addition, the University of Michigan was to release preliminary data on consumer sentiment.


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