European Stocks Up Following ECB Moves, Ahead of U.S. Jobs Report

LONDON (The Deal) -- European markets were broadly firmer Friday, following Thursday's stimulus announcements by the European Central Bank, but they were still cautious ahead of the announcement U.S. nonfarm payroll figures later Friday.

Similarly in Asia, many markets rose in early trading given their relief at what they hope will be an increase in global liquidity following the ECB's moves, which included a negative interest rate, meaning banks will pay a fee to park funds with the central bank overnight. But they then eased a little as it became clear that the Federal Reserve's ongoing taper of its quantitative easing program may have greater bearing on the health of their economies than European policies.

China was also served with a warning from the World Bank on its credit growth and urged to tackle the shadow banking system which has been lending money at high rates to municipal borrowers. The warning comes as China's own Banking Regulatory Reform Commission urged mainstream banks to increase lending to small businesses and retail borrowers. The benchmark Shanghai Composite Index closed down 0.54% at 2029.96. Hong Kong's Hang Seng was down 0.69% at 22,951, while in Japan the Nikkei 225 was down just 0.01% at 15,077.24.

Germany's economy has shown signs of picking up, as figures for April exports were better than expected despite the stubborn strength of the European currency. However, 0.2% growth in industrial production, though an improvement on March, was less impressive than analysts had expected. But in London, a more favorable report than last year from the International Monetary Fund on the current government's economic program helped buoy the mood. And the French government also announced an improvement in its budget deficit for April.

The FTSE 100 was up 0.28% at 6,932. In Paris, the CAC 40 was up 0.1% at 4,553 and Frankfurt's DAX index was up 0.22% at 9,969.

In London,electronic games retailer Game Digital announced the offer price for its IPO at 200 pence a share, at the bottom of its pricing range, valuing the company's stock at 340 million pounds ($419 million). But in conditional trading Friday, the share was already down 0.5 pence at 199.5 pence by mid-morning, suggesting that concerns about the large number of retail sector IPOs in recent months have not diminished.

Meanwhile, Italian fashion group Prada saw its Hong Kong-listed shares slide 7% on poor quarterly results that appeared to show Chinese consumers are toning down their conspicuous consumption. Even abroad, high spending Chinese tourists have been keeping those luxury good purchases in check.

 

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