European shares were mixed yesterday as EU leaders gathered for the summit aimed at creating a permanent financial rescue fund for debt-laden eurozone nations.
In London, the FTSE 100 index ended down 0.2 per cent at 5,881.12 points, while in Paris the CAC 40 climbed 0.21 per cent to 3,888.36 points and in Frankfurt the DAX rose 0.11 per cent to 7,024.40 points.
“The focus today is the EU summit, where markets are looking for a coherent and unified approach from policymakers to address the debt and banking crisis,” said VTB Capital economist Neil MacKinnon.
European leaders are gathering in Brussels to seek a permanent financial rescue fund to calm markets for good and turn the page on a roller-coaster year marked by Greek and Irish bailouts and fears for Spain.
“The EU summit which started yesterday could be the last significant market event of the year,” added Rabobank analyst Jane Foley.
Heads of state and government are holding the two-day parley amid stubborn concerns that Portugal and even wealthier Spain could tumble into the debt crisis that has rocked the euro.
EU leaders now want to replace a €750-billion joint EU-IMF rescue mechanism, which was created in May and expires in 2013, with a permanent fund to shield the single currency from turbulence for the long run.
The European Central Bank, which has bought billions of euros in government bonds to ease the eurozone debt crisis, has urged political leaders to beef up the European Financial Stability Facility (EFSF).
“There is likely to be support for a permanent rescue mechanism to replace the EFSF,” MacKinnon said.
Elsewhere in Europe, Amsterdam rose 0.31 per cent, Brussels dipped 0.30 per cent, Milan slid 0.21 per cent, and Lisbon fell 0.71 per cent. Swiss stocks rose 0.09 per cent.
On Wall Street, a drop in jobless claims and a rise in house construction pushed up shares.
The Dow Jones Industrial Average was up 0.30 per cent at 11,491.34 points at 1720 GMT, while the S&P 500 index, a broader measure of the market, rose 0.47 per cent to 1,236.35.
The tech-rich Nasdaq advanced 0.68 per cent to 2,635.08.
New claims for US unemployment benefits fell last week to almost the lowest level of the year to 420,000, down 3,000 from the prior week’s revised reading of 423,000, the Labor Department said.
The data was “quite positive sign for the sluggish recovery of the labor market,” said Natixis analyst Mufteeva Inna.
“However the level of the continuing claims kept rising suggesting that more people find themselves unemployed for longer periods. We expect the job market to keep improving in the course of the next two years, albeit at a rather slow pace insufficient to bring the unemployment rate below nine percent.”
Asian stock markets traded mixed yesterday as traders weighed upbeat US data against a potentially deepening eurozone crisis and the possibility of further steps by China to cool its economy.
Tokyo ended the session flat, Sydney closed up 0.34 per cent, while Hong Kong fell 1.33 per cent.