Updated on
Summary European markets edged higher Friday, though gains were limited Greece concerns.
A survey showing a rise in consumer confidence in Germany helped market sentiment as it suggested the core of the European economy remains relatively stable despite the financial turmoil and uncertainty over the regions 17-country monetary union.Sharp losses earlier in the week have also encouraged some investors to hunt for cheapened stocks before the weekend, but gains appeared fragile as the outlook for Europe remains dark.The likelihood of Greece leaving the euro has been growing steadily since early May, when political parties opposed to the terms of the countrys financial rescue made huge gains in an otherwise inconclusive election.A new ballot planned for next month could see the anti-bailout political parties gain power, which would raise the likelihood of the country leaving the euro.European leaders say they want Greece to stay in the euro, but have so far shown no willingness to compromise on its austerity terms. The uncertainty of a Greek exit from the euro will hang over European markets at least until the elections on June 17.Any rallies are likely to prove short-lived, said Kintai Cheung, analyst at Credit Agricole CIB.Britains FTSE 100 was flat at 5,348.32 by late morning in London, while Germanys DAX rose 0.9 percent to 6,375.13. Frances CAC-40 was up 0.3 percent at 3,047.17.Spains Ibex was underperforming the wider region, falling 0.4 percent as investors waited for bailed-out lender Bankia to announce how much more money it needs from the government. Its shares were suspended from trading, having lost over 7 percent the previous day.The euro rose 0.4 percent to $1.2589 after touching a 22-month low of $1.2515 earlier in the week.Wall Street was expected to edge up on the open, with Dow futures up 0.1 percent and S&P 500 futures 0.3 percent higher.In Asia, media reports that some of Chinas biggest banks will miss their annual lending targets for the first time in seven years rattled markets. Hesitation to take out loans suggests companies are delaying investment due to uncertainty about the economic outlook.While Japans Nikkei 225 index rose marginally to 8,568.08, Hong Kongs Hang Seng lost 0.3 percent to 18,609.85. South Koreas Kospi added 0.4 percent to 1,821.98 and Australias S&P/ASX 200 shed 0.6 percent to 4,033.60.Chinese economic growth fell to a nearly three-year low of 8.1 percent in the first quarter and factory output in April grew at its slowest pace since the 2008 crisis, raising the threat of job losses.On Thursday, a private survey of Chinese manufacturers showed activity weakened further in May. The reports on the slowdown in bank lending were another sign that Chinas slowdown could be sharper than anticipated.This could also pressure China to take action as soon as possible. With this in mind, we wouldnt be surprised to see China announce some new investment projects soon, said Stan Shamu of IG Markets in Melbourne.In energy markets, the contract for oil for July delivery was up 46 cents to $91.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 76 cents to settle at $90.66 in New York on Thursday.The dollar dipped to 79.53 yen from 79.58 yen late Thursday in New York.
