Friday July 31, 02:02 PM
European markets flat as dealers wait on US data
LONDON (AFP) - Europe's main equity markets turned flat on Friday after poor economic data and downbeat company earnings in the recession-struck eurozone.
Dealers were meanwhile on tenterhooks ahead of publication of vital US economic growth data for the second quarter, due at 1230 GMT, for a key lead, especially after recent sustained equity gains made on hopes for recovery.
In early afternoon European trade, London's FTSE 100 index of top shares was up a marginal 0.02 percent to 4,632.37 points.
The Paris CAC 40 firmed 0.13 percent to 3,440.02 points while Frankfurt's DAX 30 (Xetra: news) fell 0.06 percent to 5,357.39 points.
On the foreign exchange market, the European single currency rose to 1.4096 dollars.
The unemployment rate in the 16 nations using the euro single currency rose slightly in June as companies continued to shed jobs to weather Europe's worst post-war recession, EU data showed Friday.
Seasonally adjusted unemployment stood at 9.4 percent, up from 9.3 percent in May, the European Union's Eurostat data agency said. The figure stood at 7.5 percent 12 months ago.
"With the (eurozone) economy still in recession and any recovery likely to be sluggish, unemployment, unfortunately, looks set to continue to rise this year and next," said ING economist Martin van Vliet in a note to clients.
All three main European equity markets had risen sharply on Thursday, powered by positive corporate earnings results.
A string of upbeat company reports added to positive sentiment on Wall Street on Thursday, propelling the main US indices to fresh 2009 highs.
And in Asia on Friday, Tokyo share prices jumped 1.89 percent, hitting a near 10-month high.
But in Europe on Friday, Total and Eni (Milan: ENI.MI - news) reported huge profit falls in their second-quarter results, marking a bad week for the oil majors hit by slumping prices in the worst global downturn since the 1930s.
In Paris, shares in French oil and gas group Total sank three percent to 38.79 euros after it revealed that second-quarter net profit fell 54 percent from a year earlier to 1.7 billion euros.
In Milan, Eni saw its shares drop 6.16 percent to 16.61 euros after it reported a 75.8-percent profits collapse to 832 million euros.
Oil prices hit a record 147 dollars per barrel in July 2008 but then plunged as the global financial crisis pushed the United States, Europe and Japan deep into recession.
In London, struggling British Airways (LSE: BAY.L - news) revealed Friday that it slumped to a pre-tax loss in its first quarter and warned the outlook remained uncertain as the global economic downturn also slashes demand for air travel.
BA said it made a pre-tax loss of 148 million pounds (173 million euros, 245 million dollars) in the three months to June, compared with a profit of 37 million pounds in the 2008 quarter.
This was the first, first-quarter pre-tax loss for the company since its privatisation in 1987.
However, BA shares rose 6.85 percent to 143.50 pence as investors set aside the news.
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