European markets mixed after 3rd quarter GDP figures; BA, Iberia stocks rise on planned merger

By Louise Watt, AP
Friday, November 13, 2009

European stocks fluctuate after growth data

LONDON — European stock markets were looking for direction Friday as investors digested data showing the eurozone has emerged from recession but that France and Germany’s recovery was slower than most analysts expected.

Meanwhile, shares in British Airways and Iberia rose after they confirmed their planned merger.

In morning trading in Europe, Britain’s FTSE 100 added 0.1 percent to 5,279.62, Germany’s DAX climbed 0.2 percent to 5,672.23 and France’s CAC 40 slipped 0.3 percent to 3,796.85.

Asian markets closed mixed amid investor uncertainty about the global outlook after Wall Street fell Thursday on weak energy demand. Markets in Tokyo and Seoul declined, while Hong Kong and China gained. Major U.S. indexes slid by about 1 percent Thursday and were expected to rise slightly on the open.

Official figures Friday showed the eurozone’s economy grew by 0.4 percent in the third quarter, meaning the 16-country euro area has joined the United States and Japan out of recession. However, the rise in output was not as big as most economists had been predicting, as growth in major economies, such as Germany and France, fell short of expectations.

Germany and France continued their economic recovery in the third quarter on a rise in exports, after technically emerging from recession in the previous three months. Germany’s growth accelerated to 0.7 percent — just short of economists’ forecast of 0.8 percent. The preliminary estimate was still the strongest since the first quarter of 2008.

France’s growth remained at 0.3 percent, the same as in the second quarter. Analysts were disappointed, however, as private spending was stagnant and fixed investment continued to fall.

Meanwhile, shares in British Airways PLC and Iberia SA rose as the market reacted to the airlines’ confirmation late Thursday that they had agreed to merge. BA stock added 2.9 percent and Iberia 1.8 percent.

“The BA story is a little bit of a hangover from yesterday that is still quite prominent in the background,” said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers.

He added that oil stocks were sapping some of the energy from the market after Thursday’s inventory figures. The U.S. Energy Information Administration said oil inventories rose 1.8 million barrels and gasoline stocks grew 2.5 million, both more than expected. Shell dropped 1.3 percent and Total lost 0.5 percent Friday.

Earlier, Tokyo’s Nikkei 225 fell 34.18 points, or 0.4 percent, to 9,770.31 while Seoul’s Kospi was off 0.1 percent at 1,571.99. Singapore’s market traded flat, while Sydney shed 0.8 percent.

Among rising markets, China’s benchmark Shanghai Composite Index added 0.5 percent to 3,187.65, and Hong Kong’s Hang Seng recouped its early losses to gain 0.7 percent to 22,553.63.

Wall Street was poised for a modestly higher open Friday, with Dow and Standard & Poor’s 500 futures up 0.2 percent each.

On Thursday, the report showing a jump in U.S. energy inventories caused stocks to slide on concern gasoline demand was falling due to the struggling economy.

The Dow Jones industrial average lost 0.9 percent, or 93.79 points, its biggest drop since Oct. 30 and only its second this month.

That overshadowed an unexpectedly strong jobs report by the Labor Department, which said new unemployment claims fell last week to the lowest level since January.

Also Thursday, the S&P 500 index fell 11.27, or 1 percent, to 1,087.24, after two days of gains.

Oil rose in European trade, with benchmark crude for December delivery up 51 cents at $77.45 in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.34 to settle at $76.94 on Thursday.


AP Business Writer Joe McDonald in Beijing contributed to this report.

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