European stocks resist bad news
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Despite the official announcement of Germany's recession, most European markets finished slightly up as Frankfurt gained 0.62% at closing. Wall Street kept falling with the Dow Jones losing 0.52 % at mid-session.
US share prices wobbled Thursday after trade figures offered further evidence of a sharp slowdown in the US economy while European investors grappled with news that Germany was officially in recession.
On Wall Street the Dow Jones Industrial Average was down 0.52 percent at 8,239.73 at mid-day. The tech-heavy Nasdaq had fallen 1.14 percent to 1,482.19.
The declines followed a report that while the US trade deficit narrowed in September, imports showed a record slide, with exports also down sharply -- indications that US economic momentum was running out of steam.
In Europe the Frankfurt DAX index brushed aside a disclosure that Germany, the biggest eurozone economy, had officially fallen into recession.
The DAX finished the day with a gain of 0.62 percent at 4,649.52, powered by a solid showing in the automobile sector and as investors had already taken account of the recession announcement.
The German economy shrank 0.5 percent in the third quarter, following a contraction of a 0.4 percent in the second quarter, the Destatis statistics service said, meeting the technical definition for a recession -- two consecutive quarters of shrinking economic activity.
The contraction was worse than expected and mainly the result of a negative trade balance, with softer exports and considerably higher imports toppling a key German economic pillar.
UBS economist Martin Lueck added that the German recession was "deeper than we thought."
It was also the first major economy to confirm that a long-feared recession had arrived, with France, Italy and the entire 15-nation eurozone expected to follow on Friday.
The United States, Japan and Britain are also on the brink, according to a report from the Organisation for Economic Cooperation and Development, which predicted that the world's leading industrialised powers would sustain negative growth of 0.3 percent next year.
Elsewhere on European markets there were gains of 1.10 percent in Paris, 0.92 percent in Milan, 1.08 percent in Madrid and 0.65 percent on the Swiss Market Index, the advances generally coming after losses on Wednesday and in response to positive corporate news.
Bucking the trend was the London FTSE 100 index, which lost 0.31 percent to close at 4,169.21 points. Telecoms group BT nonetheless soared 8.89 percent after announcing plans to slash 10,000 jobs as a cost-cutting measure.
Dragging down the FTSE was the brokerage group Icap, which gave up 10.36 percent.
Thousands of British jobs have also been axed this week by British-based cable television firm Virgin Media, telephone directories group Yell, housebuilder Taylor Wimpey and drugs giant GlaxoSmithKline.
"It is difficult to think of anything apart from doom and despair," said Capital Spreads managing director Simon Denham in London.
Investors in New York meanwhile digested a digested a forecast of weaker results from tech giant Intel and profits in line with expectations from retail sector leader Wal-Mart.
On the economic front, the US trade deficit fell 4.4 percent to 56.5 billion dollars in September, which would normally be seen as positive but the data showed steep declines in both imports and exports.
"Trade can no longer prop up the US economy," said Peter Kretzmer, economist at Bank of America.
"If we look out over the next 12 months, both export and import volumes will drop -- meaning not just slower growth, but outright declines -- as the global recession reduces trade activity."
"The major headlines today aren't of the uplifting variety," said Patrick O'Hare at Briefing.com.
Russia's two main stock markets, the RTS and the MICEX, also briefly suspended trading on Thursday after plunging at the open, following trading suspensions the previous day. The exchanges later closed with respective losses of 2.37 percent and 7.62 percent.
Earlier in Asia, Tokyo tumbled 5.25 percent, Hong Kong dived 5.15 percent and Sydney shed 5.9 percent to finish at a four-year low.
China reported a sharp slowdown in industrial production growth -- the latest sign that the Asian economic powerhouse is losing momentum.
Premier Wen Jiabao was quoted in the state media as saying the impact of the global financial woes on China's economy was "worse than expected."
Investors were turning their attention to a summit on the financial crisis that will bring together leaders of the Group of 20 industrialised and emerging nations from Friday in Washington.
Japan will offer at the meeting to lend up to about 100 billion dollars to the International Monetary Fund to help boost loans to emerging countries hit hard by the financial crisis, local media reported.
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