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May 26, 2011    

Most European markets down on worries about Greek debt

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by Elaine Frei
Most European markets down on worries about Greek debt

European equities markets were mostly lower Thursday on the possibility that the International Monetary Fund might not make its payment of bailout money to Greece next month as scheduled, with Luxembourg’s Prime Minister, Jean-Claude Juncker citing IMF rules that could prevent the payment, while former European Central Bank chief economist said that even though it is not physically impossible for Greece to repay its debt, the nation is virtually insolvent and ultimately probably will not pay.

In other bad news, this time from the United States, new data showed that the US economy grew just 1.8 percent in the first quarter over the same period last year, less of a gain than expected.

Despite the new data, London markets defied the trend downward as the FTSE 100 added 0.18 percent to 5,880.99 and the FTSE 250 was up 0.13 percent to 11,841, as the mining, energy, insurance and retail sectors were mostly higher while the health care, telecommunications, travel and leisure an utilities sectors were mixed and the media sector and banks were mostly lower.

Miners made up three of the five biggest gainers on the 100, with copper miner Antofagasta (LSE: ANTO) the best performer in the sector as it added 3.45 percent after it said that first quarter profit was up 30 percent on higher output and prices, while platinum miner Lonmin (LSE: LMI) was up 2.54 percent and gold and silver miner Fresnillo (LSE: FRES) gained 2.3 percent.

Engineering firm Weir Group (LSE: WEIR) led gains on the 100, adding 5.31 percent while Pace (LSE: PIC), which makes set-top boxes for cable and satellite TV, was the best performer on the 250 as it gained 6.11 percent, but fashion house Burberry Group (LSE: BRBY) had the worst day on the 100 when it was down 4.55 percent after it said its first-half operating margin will like be down while publisher and broadcaster Daily Mail & General Trust (LSE: DMGT) led the media sector lower and was the worst performer on the 250 as it dropped 7.47 percent.

The FTSE Eurofirst 300 was down 0.06 percent to 1,126.37 while the IBEX fell 0.14 percent to 10,203.2, the CAC-40 was 0.3 percent lower to 3,917.22 and the Dax dropped 0.79 percent to 7,114.09.

Markets in Asia and the Pacific region were higher, although the Shanghai Composite went against the trend and dropped 0.19 percent in China.

The Nikkei 225 was up 1.48 percent to 9,562.05 in Tokyo, while the Topix index added 1.14 percent to 827.08 and the Mothers market gained 1.66 percent to 453.58 as a weaker yen and higher commodities prices helped stocks see gains there as carmakers were up on upgraded recommendations for several in the sector, oil producers gained on higher prices for crude oil, and camera and copier maker Canon (TYO: 7751) added 5.62 percent after it announced a share buyback plan.

The Straits Times Index was up 0.16 percent to 3,123.7 in Singapore, Hong Kong’s Hang Seng added 0.67 percent to 22,900.8, the Taiex was 0.7 percent higher to 8,788.4 in Taiwan, India’s Sensex was up 1.11 percent to 18,044.6, Australia’s markets saw gains on a Deutsche Bank ban upgrade of the mining sector to “overweight” with the Sydney Ordinaries gaining 1.58 percent to 4,735.1 while the S&P/ASX200 added 1.65 percent to 4,735.1, and the Kospi was up 2.75 percent to 2,091.91 in South Korea on positive comment on share prices there from both Credit Suisse and Citigroup.

New York markets were higher in midday trade, with the Dow Jones Industrial Average up 0.03 percent to 12,398.3 while the S&P 500 added 0.19 percent to 1,322.97 and the Nasdaq Composite was 0.63 percent higher to 2,778.86.

Crude oil prices were lower after new data showed that the US economy grew by just 1.8 percent in the first quarter, less than expected, raising questions about demand recovery, with West Texas Intermediate crude down $1.29 to $100.03 per barrel at midday on the New York Mercantile Exchange while Brent crude was recently reported down 37 percent to $114.56 per barrel on the ICE Futures Europe exchange in London.

Among metals, copper was slightly higher in New York trade but gold and silver were both lower on low trade volumes ahead of a three-day weekend in the United States, where markets will be closed Monday in observance of Memorial Day.

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