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European stocks mostly head higher
Written by Saumyatanu   
Friday, 10 December 2010 14:36

European stocks mostly head higher

 

Europe's main stock markets mostly rose on Thursday as investors took a breather over the eurozone debt crisis while awaiting the Bank of England's latest decision on interest rates.

Approaching midday trade, London's FTSE 100 index was up 0.35 percent at 5,814.55 points.

Frankfurt's DAX 30 index dipped 0.04 percent to 6,973.29 points and in Paris the CAC 40 grew 0.53 percent to 3,852.19 points.

The Stoxx 50 index of leading eurozone companies gained 0.65 percent to 2,837.36 points.

"Markets are just tracking higher slowly but surely as finally investors are no longer focusing on the doom and gloom scenario within the eurozone, but instead the year end and the possibility that the FTSE could reach the 6,000 (points) level," said Simon Denham, head of trading group Capital Spreads.

"All the indices seem to be heading higher with Asian stocks putting in modest gains and yesterday US markets closed at their second highest level of the year."

The Bank of England is widely expected to announce at 1200 GMT that it is maintaining its key interest rate at a record low level of 0.50 percent.

In Asia meanwhile, Tokyo stocks jumped to a seven-month high as Asian markets mostly rose, but lingering concerns over expected economic tightening by China weighed on Shanghai shares, traders said.

Tokyo's Nikkei index ended the session up 0.52 percent at 10,285.88 points, its highest level since May.

Spirits were also lifted by news that Japan's economy grew by more than previously thought in the third quarter due to capital spending by companies, with year-on-year growth revised up to 4.5 percent, although there was caution about the fourth quarter.

Chinese shares slid on investor caution ahead of November inflation data due on Saturday, amid expectations of an interest rate hike or other measures to damp down the mainland economy.

US stocks closed modestly higher on Wednesday as traders awaited developments on a controversial tax-cuts deal that is seen key to the economic recovery.

A compromise between President Barack Obama and his Republican foes would see an extension of tax breaks to all income classes, including the wealthiest Americans, which Obama had vehemently opposed.

But the deal was still far from done as it faces an uphill battle in Congress.