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European, Asian Stocks Mixed; BNP Paribas Falls

LONDON ( The Deal) -- European and Asian markets were mixed Friday, with lender BNP Paribas leading French stocks lower on a report that it may be forced to pay a penalty of more than $10 billion to end a U.S. criminal probe into alleged sanctions violations.

In London the FTSE 100 rose 0.02% to 6,872.92, while in Paris the CAC 40 fell 0.32% to 4,516.15. In Frankfurt the DAX rose 0.16% to 9,954.61.

BNP Paribas fell 4.06%, following a report in The Wall Street Journal that it may be forced to pay a penalty exceeding $10 billion in connection with a U.S. Department of Justice criminal probe into alleged sanctions violations.

Prosecutors are looking into allegations that BNP Paribas transferred funds for clients in violation of sanctions in Iran, Sudan and Cuba, and the lender is reportedly seeking to pay less than $8 billion. The yearlong investigation is likely to drag on for another few weeks.

French lender Societe Generale also lost some steam, after Les Echos newspaper reported a fall in fourth-quarter profit at OAO Rosbank, a Moscow-based bank majority-owned by Societe Generale.

Societe Generale shares fell 2.3% in Paris.

In the U.K., a rise in consumer confidence to an 18-month high was tempered by evidence of a slowdown in house price inflation in London and the rest of the country, as reported by Hometrack Ltd.

The report showed that home prices rose by 0.5% in May, following a 0.6% increase in April, as buyers' resolve is tested by strong price increases, widespread talk of a possible housing bubble and recent warnings from the Bank of England on house price inflation, the authors said.

Later Friday, investors will be looking to economic data out of the U.S., including the May business barometer from the Institute for Supply Management-Chicago. Analysts surveyed by Bloomberg News are expecting a reading of 61, compared to 63 in April.

Asian markets were also mixed: Tokyo's Nikkei fell 0.34% to 14,632, while Hong Kong's Hang Seng gained 0.31% to 23,081.65.

There was some nervousness over the Japanese economy, following a report showing the country's core inflation rate rose to 3.2% in April, the biggest jump in 23 years, following a tax increase that took effect at the start of the month.

Excluding the effects of the tax, the underlying inflation rate was 1.5% -- more than the 1.3% increase in March.

A separate report by Japan's trade ministry released Friday showed that industrial production and household spending both fell more than expected. Production fell 2.5% in April from the previous month, while household spending dropped 4.6% from a year ago.

On a positive note, Japanese power companies rose on expectations that the government will move to limit the amount of compensation that companies would have to pay in case of future accidents, following a report in Nikkei newspaper.

Tokyo Electric Power led utilities higher, rising 5.36% in its biggest one-day gain in nearly four months. 

In India, Tata Motors lost some steam a day after reporting disappointing fourth-quarter profit. Net income fell to 39.2 billion rupees ($664 million) from 39.5 billion rupees a year earlier. The bright spot was the Jaguar Land Rover unit, where fourth-quarter profit fell to 449 million pounds ($750 million) from 377 million pounds a year earlier. The stock was down about 1.9% in Mumbai.

Tata Motors has been struggling to get its Indian business back and track, and blamed the poor numbers on a difficult economic climate marked by high inflation, higher fuel prices and reduced availability of finance to buy cars.

During the year Tata Motors launched a number of value-added products and services in India, including Tata Alert, a 24-hour call service for trucks on the highway, which the producer said has helped it keep a strong market position. It's also introduced several new passenger car models including the Nano Twist. Billed as an even trendier version of the Tata Nano, it comes in purple and features electric assisted steering to supposedly make for easy driving and parking.

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