European stock markets closed slightly higher yesterday, with investors consolidating positions in subdued trade against a backdrop of slowing economic growth and persistent eurozone debt fears.
Dealers said data, including the latest US durable goods figures, pointed to at least a temporary slowdown in the months ahead, with China’s cooling measures finally having an effect on its booming economy.
The Greek debt crisis continues to unsettle the markets amid sharp exchanges between the European Central Bank which opposes any restructuring of its obligations and politicians hoping to find some way out of a dangerous impasse.
Dealers said yesterday’s gains, like Tuesday’s, were only a modest technical rebound after recent sustained losses, especially in commodities-linked stocks, and investors showed no appetite for any major commitment.
In London, the FTSE 100 index of leading shares closed up 0.20 per cent at 5,870.14 points. In Frankfurt, the DAX added 0.28 per cent to 7,170.94 points and in Paris the CAC 40 rose 0.31 per cent to 3,928.99 points.
Other European markets posted similar gains but Madrid and Milan both managed gains of around one percent.
“Major equity markets remain unsettled on the back of downbeat economic news flow and persistent worries over lack of policy unanimity in dealing with the eurozone debt and banking crisis,” said Neil MacKinnon, analyst at VTB Capital financial group.
Dealers said last Tuesday’s closely tracked Ifo index of business sentiment in Germany continued to weigh on sentiment as expectations for the coming six months were “somewhat dampened.”
“This is not earth-shattering but indicative of a possible cooling in Germany’s export-led recovery, as well as a reminder that for the eurozone generally, growth prospects are dim given the contraction taking place in some of the so-called peripheral economies,” Mr MacKinnon said.
As for Greek’s debt problems, “there remains a fair degree of negative and concerned sentiment in the markets regarding the European sovereign debt situation and what may be down the road for not just Greece, but also Spain, Portugal and Italy,” said analyst Joshua Raymond at traders City Index.