Updated on
Summary European stock markets rebounded slightly on Thursday brushing aside downbeat US growth data.
This was observed as dealers awaited fresh Spanish austerity budget measures amid fears Madrid needs a full bailout.Londons benchmark FTSE 100 index of top companies rose 0.19 percent to 5,779.07 points in afternoon deals after official data showed Britains recession-hit economy shrank less than thought in the second quarter.Frankfurts DAX 30 climbed 0.22 percent to 7,292.16 points and in Paris the CAC 40 gained 0.51 percent to 3,432.41 points.Madrids IBEX 35 index was up 0.11 percent a day after it plunged almost four percent in value.Wall street also moved higher Thursday even though official data indicated the US economy was more sluggish than thought in the second quarter.Five minutes into trade, the Dow Jones Industrial Average was up 0.37 percent, the S&P 500 rose 0.37 percent, while the Nasdaq Composite gained 0.27 percent.In foreign exchange trade, the euro stood at $1.2888, up from $1.2870 late in New York on Wednesday. Gold prices climbed to $1,756.25 an ounce on the London Bullion Market from $1,744.75 on Wednesday.European equities had tumbled on Wednesday on heightened concerns over a full bailout of debt-plagued Spain, and amid falling confidence in the US Federal Reserves latest stimulus plan, traders said.They recovered a little in initial deals on Thursday 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 months US and European central bank stimulus announcements had evaporated.Spains government was on Thursday set to pass its 2013 austerity budget, with 39 billion euros ($50 billion) in savings, including an anticipated third straight year of salary freezes for civil servants.The budget, to be followed by the release of an audit of Spains sickly banking system on Friday, was seen by markets as one of the final acts before a sovereign bailout.Prime Minister Mariano Rajoys right-leaning Popular Party government has already accepted a eurozone rescue loan for the banks of up to 100 billion euros.In the United States, the Commerce Departments third estimate of gross domestic product growth of 1.3 percent was well below expectations that it would be unchanged from the prior estimate of 1.7 percent.The second-quarter GDP number marked the slowest growth since the first quarter of 2011, and followed a 2.0 percent annual pace in the first quarter.But Europes markets had a lift from solid gains in Shanghai, where there were hopes the Chinese government would soon announce fresh easing to boost the economy after a string of weak data.Chinese markets are closed next week for the National Day holiday, which could provide a chance for leaders to introduce measures such as an interest rate cut or a reduction in bank reserve requirements, dealers said.
