Europe close: Stocks mixed ahead of US debt vote
US postpones debt ceiling decision; IMF cuts growth forecasts for global economy; Cameron commits to EU referendum; Contraction deepens in Spain in Q4, says Bank of Spain.
- US to postpone debt ceiling decision
- IMF cuts growth forecasts for global economy
- Cameron commits to EU referendum
- Contraction deepens in Spain in Q4, says Bank of Spain
Dax 30: 0.19%
FTSE Mibtel 30: -0.77%
Ibex 35: -0.11%
Stoxx 600: 0.22%
European equities finished mixed Thursday as the US votes to postpone a decision of raising the debt ceiling and the International Monetary Fund (IMF) slashed its growth forecasts for the global economy.
Investors have taken a cautionary pause ahead of a vote by the US House of Representatives to pass legislation suspending the government's $16.4trn debt limit until May 19th.
The strategy will allow Republicans to focus on other deadlines to seek deeper spending cuts from President Barack Obama and Congressional Democrats. A March 1st deadline looms to pass a bill before automatic spending reductions start.
The US is not the only country facing a road block in its effort to pull itself out of debt.
The IMF said that the upturn for the global economy was expected to be "more gradual" than previously thought. In its World Economic Outlook update, the group said that while financial conditions improved in the fourth quarter of 2012, "a broad set of indicators for global industrial production and trade suggests that global growth did not strengthen further".
Cameron announces EU referendumPrime Minister David Cameron said his party would hold a referendum on whether the UK should remain in the EU in the first half of the next parliament. The referendum would be due to take place no later than by the end of 2017.
"It will be an in-out referendum and when the referendum comes let me say now that if we can negotiate such an arrangement, I will campaign for it with all my heart and soul because I believe something very deeply," Cameron said before adding "That Britain's national interest is best served in a flexible, adaptable and open European Union and that such a European Union is best with Britain in it."
German Chancellor Angela Merkel urged Britain to remain within the European Union. "Germany, and I personally, want Britain to be an important part and an active member of the European Union," she said.
"We are prepared to talk about Britain's wishes but we must always bear in mind that other countries have different wishes and we must find a fair compromise. We will talk intensively with Britain about its individual ideas but that has some time over the months ahead."
Contraction deepens in Spain, says central bankThe Bank of Spain forecast a 0.6% contraction in the country's economy during the fourth quarter of 2012, in its January 'Economic Bulletin' Wednesday. Such results would entail a fall of 1.7 % in its year-on-year rate of growth.
In a separate announcement, Spanish Finance Minister Luis de Guindos insisted that the the country's financial sector was stronger and healthier today than it was before thanks to recapitalisation efforts and reforms.
The country's neighbour, Portugal, was expected to syndicate a medium-term bond issue as a preliminary step before returning to the market. The speculation offers some support to the single currency.
Unilever and Novartis advanceNovartis soared 4.49% after the pharmaceutical company announced Chairman Daniel Vasella would retire from the board after 17 years.
Unilever gained 3.18% after the world's second biggest consumer-goods company posted fourth-quarter underlying sales growth of 7.8%.
TUI Travel tumbled 4.96% after German shareholder TUI AG called off plans to merge the two companies.
Italy's Banca Monte dei Paschi di Siena dropped 9.47% following reports it was facing losses of at least €220m from a derivatives deal made three years ago.
Brent crude climbsThe euro/dollar fell 0.20% to the 1.3296 mark.
Front month Brent crude futures rose by $0.293 to the $112.750 mark on the ICE.