The European markets ended Friday's session with a slight increase, after hopes for further economic stimulus in the U.S. faded. The meeting between Greek Prime Minister Samaras and German Chancellor Merkel today resulted in no decision regarding an extension for Greece to implement reforms. Banks and miners were among the weakest performers during the trading session.
Statements made by St. Louis Fed President James Bullard have extinguished investor hopes for further U.S. economic stimulus. Bullard stated that current economic conditions weren't weak enough to justify another round of stimulus. Bullard also said he would oppose any new program by the Fed to buy bonds to reduce borrowing costs.
As stimulus hopes fade, investors will look forward to Fed Chairman Ben Bernanke's speech on August 31 at the Kansas City Federal Reserve Bank's annual symposium in Jackson Hole for further directional cues.
German Chancellor Angela Merkel on Friday reiterated her support for Greece, saying she wanted the debt-ridden country to remain in Eurozone. Following a meeting with Greek Prime Minister Antonis Samaras in Berlin, Merkel said Germany would wait till the troika report is released next month to assess the efforts undertaken by the Greek government to meet its fiscal targets.
"I am deeply convinced that the new government under the leadership of Prime Minister Samaras will do everything possible to solve the problems in Greece," Merkel said. It is a difficult path for Greece and Germany has always said that it will support Greece, she added.
The Greek leader is set to meet with French President Francois Hollande on Saturday.
Bank of England policymaker Martin Weale said he would prefer interest rate reduction to more quantitative easing. In an interview with The Herald on Friday, he said, "I am very comfortable with the view that we need to establish whether the effects of an interest rate reduction would be positive before we might do it."
The Euro Stoxx 50 index of Eurozone bluechip stocks increased by 0.28 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.24 percent.
The DAX of Germany climbed by 0.31 percent and the CAC 40 of France rose by 0.02 percent. The FTSE 100 of the U.K. finished up by 0.01 percent and the SMI of Switzerland gained 0.34 percent.
In Frankfurt, Deutsche Bank fell by 0.65 percent, but Commerzbank gained 0.95 percent.
Volkswagen dropped by 2.26 percent, BMW lost 1.28 percent and Daimler declined by 0.66 percent.
In Paris, Societe Generale finished lower by 0.94 percent. BNP Paribas declined by 1.73 percent and Credit Agricole dropped by 0.77 percent.
Renault declined by 2.30 percent and Peugeot closed down by 4.39 percent.
In London, Anglo American dropped by 2.91 percent. The British miner and Chilean state-owned Corporación Nacional del Cobre de Chile finally reached a settlement on the legal tussle between the two since October 2011 related to stakes in Anglo American Sur SA - the Chilean unit of Anglo American.
Vedanta Resources fell by 1.70 percent and Eurasian Natural Resources lost 3.58 percent. Kazakhmys declined by 2.94 percent and Anotfagasta finished lower by 1.48 percent. BHP Billiton dropped by 1.40 percent and Rio Tinto closed down by 1.59 percent.
HSBC Holdings fell by 0.38 percent after Standard & Poor's downgraded its outlook for the lender to "negative" from 'stable" citing U.S money-laundering investigations and other regulatory issues.
Barclays dropped by 1.99 percent, Lloyds Banking Group lost 0.19 percent and Royal Bank of Scotland decreased by 2.19 percent.
SeaEnergy declined by 7.20 percent after, the company acquired Aberdeen-based Return To Scene LTD or R2S for an initial cash payment of 5 million pounds.
The U.K. economy contracted less than initially estimated in the second quarter on smaller declines in construction and production sectors. Gross domestic product shrank 0.5 percent in the second quarter, revised upwards by 0.2 percentage points from the fall of 0.7 percent published on July 25, data from the Office for National Statistics showed Friday.
Output of the U.K. services sector declined sharply in June, following a rebound in the previous month, data released by the Office for National Statistics revealed Friday. The index of services dropped 1.7 percent from May, when it rose 0.9 percent. Economists had expected a 1.8 percent decline.
Strength in the volatile transportation sector powered another increase in U.S. durable goods orders in July, marking the third consecutive month of growth. According to figures released Friday by the Commerce Department, new orders for durable goods came in at $230.7 billion in July, a 4.2 percent increase from June levels.
The increase was much stronger than economists had expected, with most forecasting an increase of 1.9 percent, much closer to the 1.6 percent growth seen in July.
by RTT Staff Writer
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