LONDON: European stock markets wobbled yesterday as the United States reported encouraging jobs data but anxiety mounted over a looming deadline for US lawmakers to reach a budget compromise.
London’s benchmark FTSE 100 index climbed 0.21 percent to close at 6,565.59 points, Frankfurt’s DAX 30 slid 0.02 percent to 8,664.10 points, and the CAC 40 in Paris dropped 0.21 percent to 4,186.72 points.
Milan dropped by 1.2 percent, however, on renewed concerns over the stability of the Italian government as the process of stripping former prime minister Silvio Berlusconi of his seat in the Senate following his conviction on tax fraud charges.
“It’s been another rather slow and mixed session for Europe’s markets as we drift towards the end of the week with optimism about a continued improvement in US weekly jobless claims being offset by background concerns about the political circus playing out stateside, with respect to the raising of the debt ceiling,” said CMC Markets UK analyst Michael Hewson.
According to figures released yesterday, new claims for US unemployment benefits totalled 305,000 in the week ending September 21, down from 310,000 the previous week.
The news helped reverse a slide in US stocks, which had been in retreat because of the acrimonious budget debate in Washington and the prospect of a government shutdown if lawmakers fail to reach a deal. US Republicans and Democrats have until midnight on Monday to agree a budget package to fund the government. If a deal is not reached some federal agencies will shut down from Tuesday, and hundreds of thousands of workers will be sent home.
Adding to investors’ fears is Republicans’ refusal to agree to lift the US debt ceiling from $16.7 trillion — which must be achieved by mid-October — unless the new budget cuts funding for President Barack Obama’s health care law.
The jobless data helped Wall Street advance in midday trading, with the Dow Jones Industrial Average rising 0.25 percent. The broad-based S&P 500 increased 0.18 percent and the Nasdaq Composite Index was up 0.49 percent.
The dollar rose thanks to the US jobs data. The euro was trading at $1.3484, down from $1.3525 in New York on Wednesday. The dollar climbed to 98.95 yen from 98.40. Sterling fell to $1.6014 from $1.6080, and one British pound bought ¤1.1876, down from 1.8888. On the London Bullion Market, the price of gold gained to $1,333 an ounce from $1,322.75 on Wednesday.
In company activity, Alcatel-Lucent rose 6.3 percent to 2.69 on reports of a possible link-up with Nokia. German sanitary fittings maker Grohe announced a takeover worth ¤3bn ($4.1bn) by Japanese housing and building materials company Lixil in a deal to form the world’s largest player in the sector. AFP
