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European Markets Mixed After EC Forecasts Mild Recession

The European markets are trading mixed in afternoon trading Thursday, after the European Commission said the euro area is likely to see a mild recession in 2012. Some impressive economic data from Germany influenced sentiment early. The Asian markets fell on growth worries, while the U.S. index futures are higher.

In its interim forecast, the European Commission said the Eurozone is expected to contract 0.3 percent this year, compared to the 0.5 percent expansion estimated in the autumn forecast.

The downside risks remain substantial despite some favorable developments in recent weeks, the commission assessed. If an aggravation of the sovereign-debt crisis were to result in a credit crunch and ensuing lower domestic demand, this would probably entail a deeper and prolonged recession.

The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.29 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is sliding 0.01 percent.

The German DAX is down 0.29 percent while the French CAC 40 is sliding 0.08 percent. The UK's FTSE 100 is gaining 0.25 percent and Switzerland's SMI is gaining 0.09 percent.

In Frankfurt, Allianz, which reported financial results, is leading the gainers by adding 2.9 percent. Peer MunichRe is gaining about 2 percent.

Basf and Bayer are notably higher.

Deutsche Bank is advancing 1.1 percent, while Commerzbank is declining 4.7 percent. Germany's second-biggest lender reported a higher profit for the fourth quarter and announced plans to further boost its capital structure.

Deutsche Telekom is losing about 2 percent. The company reported a wider loss for the fourth quarter and expects to post lower earnings for 2012.

Citigroup added automotive supplier Continental to "Most Preferred List." The stock is flat.

In Paris, metal fabrication firm Vallourec is losing 5.6 percent after announcing financial results on Wednesday.

Credit Agricole is losing 3.8 percent. The lender reported a loss for the fourth quarter, weighed down by exposure to Greece. Societe Generale and BNP Paribas are in negative territory. Natixis, which reported financial results, is climbing 7.4 percent.

Peugeot and Renault are declining 2.9 percent and 2.2 percent, respectively.

Pernod-Ricard and Essilor International are notably higher.

In London, Royal Bank of Scotland, which reported a wider loss for the year, is climbing 4.5 percent.

Barclays is gaining 2 percent and Lloyds banking is up 3.1 percent.

British American Tobacco is falling 1.8 percent. The company reported higher profit for the full year.

Capita is climbing 3.6 percent.

RSA Insurance is declining 3.7 percent.

Kier Group is declining 7.45 percent as the company sees a challeging medium-term.

Swiss Re is up 2.9 percent in Zurich after turning to a quarterly profit.

Dexia is declining 4.6 percent in Brussels. The lender reported a full-year loss, hurt by exposure to Greece and some restructuring losses.

JP Morgan raised its rating on Ericsson to "Overweight" from "Neutral."

Commerzbank upgraded Qiagen to "Buy" from "Hold."

Enel shares are flat after Citigroup raised the stock to "Neutral" from "Sell."

In economic news, German business sentiment improved more than expected in February, reports said Thursday, citing a survey from the Munich-based Ifo institute. The confidence index rose to 109.6 from 108.3 a month ago. Economists had expected the index to climb to 108.8.

Data from a survey by Conference Board showed that Germany's leading economic indicator increased for the third consecutive month in December. The leading economic index increased to 103.9 in December from 103.6 in November.

Across Asia/Pacific, markets mostly fell on growth worries. Australia's All Ordinaries slipped 0.11 percent and Hong Kong's Hang Seng lost 0.78 percent. Japan's Nikkei 225 gained 0.44 percent while China's Shanghai Composite Index added 0.25 percent.

In the U.S., futures point to a higher open on Wall Street. In the previous session, the Dow edged down 0.2 percent, the Nasdaq fell 0.5 percent and the S&P 500 slipped 0.3 percent.

In the commodity space, crude for April delivery is adding $0.14 to $106.42 per barrel and April gold is rising $7.5 to $1778.8 a troy ounce.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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