The European markets are lower in afternoon trading Friday, as yield on Spanish 10-year bonds rose above 6 percent, ahead of the announcement of the results of the stress tests conducted on the country's banks.
The Spanish government on Thursday unveiled its budget for 2013, which focused on spending cuts rather than tax hikes. Under the new budget, government ministries will have their budgets slashed by 8.9 percent in 2013, while public spending will be cut by 58 percent overall. The government will also establish an independent fiscal authority to oversee the deficit cutting plans.
In Greece, the leaders of the three political parties supporting the coalition government have reached a tentative agreement on a new 11.5 billion euros package of spending cuts and tax increases demanded by international creditors in exchange for two major bailouts.
Retail sales in Germany recovered in August following a modest decline in the previous month. Sales rose 0.3 percent in August from a month earlier when adjusted for seasonal and calendar variations. This was a tad above the 0.2 percent growth expected by economists.
Eurozone inflation rose unexpectedly in September due to an increase in energy and food prices, flash estimate from Eurostat showed. Inflation increased to 2.7 percent in September from 2.6 percent in August. The rate was forecast to slow to 2.4 percent.
French President François Hollande, who unveiled details of his country's budget, said he aims to cut 2013 deficit to 3 percent of GDP. The country raised taxes on the super rich.
The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.90 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.60 percent.
The German DAX is falling 0.37 percent and Switzerland's SMI is losing 0.30 percent. The French CAC 40 is declining 0.97 percent while the UK's FTSE 100 is dropping 0.07 percent.
In Frankfurt, steel maker ThyssenKrupp is gaining 2.6 percent and tire manufacturer Continental is advancing 1.2 percent.
HSBC upgraded Linde to "Overweight" from "Neutral." The shares are modestly up.
Krones is gaining 3.5 percent. Berenberg raised the stock to "Buy" from "Hold."
Commerzbank and Deutsche Bank are moderately down.
HSBC cut Basf to "Neutral" from "Overweight." The stock is down 0.4 percent.
Cheuvreux cut its rating on HeidelbergCement. The stock is falling 1.8 percent.
Infineon Technologies, Lufthansa and Volkswagen are notably lower.
In Paris, construction materials maker Saint-Gobain is losing 2.4 percent. Builders Bouygues and Vinci are moderately down.
Credit Agricole and Societe Generale are moderately lower while BNP Paribas is gaining 0.8 percent.
CapGemini, Publicis Groupe and Essilor International are rising notably.
HSBC raised Air Liquide to "Overweight" from "Neutral." The stock is up 0.2 percent.
UBS raises Air France-KLM to "Buy" from "Neutral." The stock is adding 3.3 percent.
UBS removed Renault from 'European Key Call List.' Renault shares are gaining 0.7 percent.
In London, Fresnillo is gaining 3.4 percent and Antofagasta is advancing 2.4 percent. Vedanta, Rio Tinto and Randgold are notably higher.
Barclays is up 1 percent and Royal Bank of Scotland is rising 0.5 percent.
Travel operator Thomas Cook Group maintained its full year guidance, and said the UK turnaround plan is delivering against its goals. The stock is rising 3.3 percent.
Compass Group is declining 1.9 percent. Admiral Group and Tesco are notably lower.
Electrocomponents is plunging over 9 percent. The distributor of electronics and maintenance products expects sales growth in the first half to be flat on the prior year.
Heineken is up 1.2 percent in Amsterdam after winning Fraser & Neave's shareholder approval for the purchase of the remaining shares of Tiger beer maker Asia Pacific Breweries Ltd.
Syngenta is up 1.9 percent in Zurich, following a broker upgrade.
Across Asia/Pacific, markets closed mostly higher. China's Shanghai Composite Index added 1.5 percent, Hong Kong's Hang Seng gained 0.4 percent and Australia's All Ordinaries edged up around 1 percent. Japan's Nikkei 225 index, however, fell 0.9 percent.
In the U.S., futures point to a lower open. In the previous session, stocks rose notably as optimism about the possibility of further stimulus from China, Spain's new budget plans and the relatively upbeat jobless claims data outweighed disappointing reports on durable goods orders and second-quarter GDP. The Dow rose half a percent, the Nasdaq gained 1.4 percent and the S&P 500 added a percent.
In the commodity space, crude for November delivery is adding $0.06 to $91.91 per barrel while December gold is sliding $0.2 to $1780.3 a troy ounce.
by RTT Staff Writer
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