European Stocks Flat on Rise in German Unemployment

LONDON ( The Deal) -- European stocks were little changed on Wednesday, as an unexpected rise in German unemployment overshadowed a gain in economic sentiment for the 18-nation eurozone.

In London, the FTSE 100 rose 0.02% to 6,846.42. The DAX in Frankfurt rose 0.09% to 9,949.41, while in Paris the CAC added 0.06% to 4,532.48.

In May, German unemployment rose unexpectedly -- increasing for the first time in five months and causing investor jitters about the pace of recovery in Europe's largest economy.

The number of jobless rose a seasonally adjusted 23,937 to 2.905 million in May, the German Federal Labor Agency said in its latest report out of Nuremberg. Economists surveyed by Bloomberg News before the data had been betting on a drop of 15,000, but the Labor Office attributed the weak numbers to the unusually mild winter, with seasonal jobs starting earlier than usual.

The adjusted jobless rate was steady at 6.7%, its lowest in more than 20 years.

The Labor Report offset positive news from the European Commission, which showed a greater-than-expected rise in executive and consumer sentiment in May in countries sharing the common currency. Specifically, the index rose by 0.7 points to 102.7 in May. A separate report showed a slight increase in the Business Climate Indicator for the euro area.

In London, the biggest decline was posted by GlaxoSmithKline (GSK). The stock fell 1.53% to 1,609.5 pence after the pharmaceutical company revealed that it was the subject of a criminal probe in the U.K. in connection with allegations in China that employees bribed medical professionals to boost sales. In a statement, GSK said it's committed to running its business to the highest ethical standards and that it will continue to "cooperate fully" with the U.K.'s Serious Fraud Office.

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