European stocks rebound slightly on Spain budget
European stock markets rebounded slightly yesterday as dealers brushed aside downbeat US growth data and took stock of a fresh Spanish austerity budget amid fears Madrid needs a full bailout.
London’s FTSE 100 index of top companies rose 0.20 per cent to 5,779.42 points at close after official data showed Britain’s recession-hit economy shrank less than initially thought in the second quarter.
Frankfurt’s Dax 30 climbed 0.19 per cent to 7,290.02 points, while in Paris the CAC 40 added 0.72 per cent to 3,439.32 points.
Moments after the Spanish government revealed its make-or-break 2013 budget, Madrid’s IBEX 35 index closed down 0.15 per cent a day after it plunged almost four percent in value.
Wall Street also moved higher yesterday even though official data indicated the US economy was more sluggish than initially thought in the second quarter.
In midday trade, the Dow Jones Industrial Average was up 0.14 per cent, the S&P 500 rose 0.39 per cent, while the Nasdaq Composite gained 0.61 per cent.
In foreign exchange trade, the euro stood at $1.2893, up from $1.2870 late in New York on Wednesday. Gold prices climbed to $1,763 an ounce on the London Bullion Market from $1,744.75 on Wednesday.
“The market regained its breath, but remained focused on Spain. Proof is that the sharp slowdown in US growth had no effect on the session trend,” said Alexandre Baradez, analyst at Saxo Bank.
Spain announced its new budget moments before the closing bell and a day after European equities tumbled on heightened concerns over a full bailout of debt-plagued Spain, traders said.
They recovered a little in initial deals yesterday after Asian stock markets closed higher but dealers there said gains were capped as fears over Spanish and Greek debt returned to the fore.
With violent anti-austerity protests breaking out on the streets of Madrid and Athens, concerns continued to mount that the market euphoria from this month’s US and European central bank stimulus announcements had evaporated. (AFP)