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European stocks waver with fiscal cliff in focus; Dax up 0.1%

Published 12/20/2012, 07:42 AM
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Investing.com - European stock markets fluctuated between small gains and losses in rangebound trade on Thursday, as negotiations between U.S. lawmakers in Washington aimed at resolving the looming fiscal cliff crisis continued to influence market sentiment.

During European afternoon trade, the EURO STOXX 50 eased up 0.1%, France’s CAC 40 edged 0.1% higher, while Germany’s DAX 30 tacked on 0.1%.

Market sentiment was hit by growing doubts over whether a deal to avoid the U.S. fiscal cliff will be reached ahead of the January 1 deadline,  fuelling concern that automatic tax hikes and spending cuts will be triggered.

A spokesman for President Barack Obama said Wednesday that the White House would veto a tax and spending proposal presented by House Speaker John Boehner.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

Swiss lender UBS saw shares retreat 1.1% after the Hong Kong Monetary Authority said it started an investigation to see whether there was any wrongdoing by the bank in its submission of data for setting the Hong Kong Interbank Offered Rate.

UBS was fined USD1.5 billion earlier in the week to settle charges with U.S. and U.K. regulators for manipulating LIBOR rates.

Meanwhile Swedish cellphone maker Ericsson lost 2.6% after saying it would take a fourth-quarter USD1.2 billion charge related to its wireless-chip venture with French-based STMicroelectronics.

Elsewhere, in London, FTSE 100 eased up modestly on the back of strong gains in raw material producers and cigarette makers.

British American Tobacco saw shares climb 1.1% after investment bank Nomura raised its price target on the firm to GBP38.8 from GBP35.06, citing strong potential for organic product development in 2013.

Miners were mostly higher, with Rio Tinto and BHP Billiton rising 0.7% and 0.8% respectively.

Official data released earlier in the day showed that U.K. retail sales were flat in November, compared to expectations for a 0.3% increase.

Meanwhile, across the Atlantic, U.S. stock futures pointed to a mildly higher open, as investors looked ahead to a flurry of key U.S. economic data, while continuing to focus on U.S. budget negotiations.

The Dow Jones Industrial Average futures pointed to a 0.2% gain, S&P 500 futures advanced 0.2%, while the Nasdaq 100 futures indicated a 0.3% rise.

Later Thursday, the U.S. was to release the weekly report on initial jobless claims, as well as revised data on third quarter growth and data on manufacturing activity in Philadelphia. In addition, the U.S. was to publish industry data on existing home sales.

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