European stock markets closed firmer but off their highs yesterday after weaker-than-expected US data took the gloss off early gains made on a successful Spanish government bond sale, dealers said.
They said growing concerns that Spain faced a Greek-style debt crisis eased after Madrid managed to sell bonds, albeit having to pay a higher rate of interest on them, to raise fresh funds.
The advance was cut short, however, by a rise in US new jobless claims when the market had expected a further fall, stoking fears that continued high US unemployment could derail the economic recovery.
In London, the benchmark FTSE 100 index of leading shares closed up 0.30 per cent at 5,253.89 points. In Paris, the CAC 40 edged up 0.19 per cent to 3,683.08 points and in Frankfurt the DAX gained 0.53 per cent to finish at 6,223.54 points.
On Wall Street, the blue-chip Dow Jones Industrial Average was down 0.38 per cent at around 1600 GMT and the tech-rich Nasdaq Composite slipped 0.12 per cent.
Elsewhere in Europe, Amsterdam put on 0.15 per cent, Brussels rose 0.38 per cent, Madrid gained 0.74 per cent but Milan was virtually unchanged and Swiss stocks slipped 0.23 per cent.
In Asian trade earlier yesterday, markets were mixed.
Tokyo fell 0.67 per cent to snap a five-session rally, while Sydney shed 0.70 per cent.
Shanghai lost 0.38 per cent after returning from a three-day public holiday but Hong Kong rose for a seventh straight day, adding 0.38 per cent.
London got a boost from news that British energy giant had agreed to suspend its shareholder dividend and agreed to put aside $20 billion to cover costs for the Gulf of Mexico oil spill.
Such decisions would normally be disastrous for a company's share price but in this case, after so much bad news, dealers said the arrangement might just be able to draw a line under the oil spill and give some certainty to what it does next.
"It's a relief rally - the market was expecting some pretty stringent demands from the US government and so it could have been worse and the dividend suspension was not a surprise," said analyst Arifa Sheikh, analyst at fund managers GLC.
"The FTSE 100 traded higher for a seventh day in a row thanks largely to gains in BP after the energy giant announced it would suspend three quarters of its dividend payments and will set up of a $20-billion fund to pay for the oil spill," said City Index analyst Joshua Raymond.
"A successful Spanish bond auction earlier in the day has also helped to improve sentiment within the banks, which have added to BP's gains to drive the FTSE higher."
BP shares soared by almost 10 per cent at one stage and finished the day up 6.74 per cent at 359.70 pence. Elsewhere in Europe, Amsterdam put on 0.15 per cent, Brussels rose 0.38 per cent, Madrid gained 0.74 per cent but Milan was virtually unchanged and Swiss stocks slipped 0.23 per cent.
In Asian trade earlier yesterday, markets were mixed.
Tokyo fell 0.67 per cent to snap a five-session rally, while Sydney shed 0.70 per cent.
Shanghai lost 0.38 per cent after returning form a three-day public holiday but Hong Kong rose for a seventh straight day, adding 0.38 per cent.