(RTTNews.com) - The majority of the European markets ended Friday's session with modest gains. The markets struggled to find direction as the partial shutdown of the U.S. government entered its fourth day. U.S. lawmakers remain at an impasse on a temporary spending bill and increasing the nation's debt ceiling. The shutdown caused the U.S. jobs report for September to not be released.
An Italian Senate panel has recommended the expulsion of former Prime Minister Silvio Berlusconi from the Senate on Friday, due to his conviction for tax fraud. Berlusconi's influence over Italian politics diminished earlier this week. He reversed his position and supported Prime Minister Enrico Letta in a confidence vote, after earlier threatening to topple the government. Berlusconi changed his position after losing support within his own party.
The French economy will recover this year as business climate improves across all sectors, the statistical office Insee said in a report on Thursday. Over 2013 as a whole, gross domestic product will expand 0.2 percent, after remaining flat in 2012. However, this small increase as an annual average masks a sharp acceleration during 2013, it said.
The 2013 GDP forecast was revised up from a 0.1 percent contraction estimated in June.
Portugal's international creditors have approved the country's bailout terms and said the current fiscal adjustment program remained broadly on track. However, the Portuguese authorities' request for easier budget deficit goals was turned down by the creditors.
In a report on Thursday, representatives of the so-called troika of lenders comprising the European Union, the European Central Bank and the International Monetary Fund, said that there are early signs of a recovery in economic activity.
The gross domestic product is now projected to contract 1.8 percent in 2013, an upward revision of 0.5 percentage points from the previous forecast, before expanding 0.8 percent in 2014. Unemployment is expected to remain below 18 percent next year.
Troika said the program's 2013 fiscal deficit target of 5.5 percent of GDP is within reach. The government now aims to bring the deficit down to 4 percent of GDP in 2014.
The recent pickup in consumer spending in the euro area, as the latest retail sales data showed, has likely contributed to a second successive quarter of moderate GDP growth, IHS Global Insight Chief UK and European Economist Howard Archer said.
According to Archer, improving consumer confidence and the help to purchasing power coming from low inflation are adding to hopes that the bloc can gradually develop recovery over the coming months.
The economist, however, cautioned that consumers will likely remain generally cautious in their spending in the near term at least as the economic fundamentals remain challenging in most countries. The high unemployment level is unlikely to come down markedly anytime soon, and purchasing power is generally limited by muted wage growth and tight fiscal policy.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.83 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.09 percent.
The DAX of Germany climbed by 0.29 percent and the CAC 40 of France advanced by 0.88 percent. The FTSE 100 of the U.K. rose by 0.08 percent and the SMI of Switzerland gained 0.02 percent.
In Frankfurt, Commerzbank increased by 3.97 percent and Deutsche Bank added 0.62 percent.
Deutsche Telekom climbed by 3.66 percent, after UBS upgraded its rating on the stock to ''Buy'' from ''Neutral.''
Citigroup downgraded the European Steel sector to ''Underweight''
from ''Neutral.'' ThyssenKrupp fell by 0.14 percent and Salzgitter dropped by 2.25 percent. Salzgitter was reduced to ''Sell'' from ''Neutral'' at Citigroup.
In Paris, Societe Generale climbed by 1.86 percent. Credit Agricole and BNP Paribas rose by 1.79 percent and 1.07 percent, respectively.
In London, Tate & Lyle gained 0.81 percent. The maker of sweeteners and starches expects adjusted operating profit for the first half of the year to fall slightly from the prior year, amid softness in the US beverage sector. Overall, the company expects to deliver another year of profitable growth.
Premier Gold plunged by 24.44 percent, after announcing a safety issue at Cholokkaindy in the Kyrgyz Republic.
Tricorn sank by 4.04 percent, after issuing a profit warning.
Carpetright, which sees fiscal 2014 profit below expectations, declined by 8.19 percent.
Nokian Renkaat decreased by 7.59 percent in Helsinki, after the tire-maker issued a profit warning citing weaker demand in Russia.
Eurozone producer prices declined more than expected in August on a sharp drop in energy prices, underlining the muted inflationary pressure in the economy. Industrial producer prices dropped 0.8 percent in August from a year ago, which follows a flat reading in July, Eurostat reported Friday. This was the first decline in three months. Prices were forecast to ease by a more moderate 0.5 percent in August.
Germany's producer prices declined in August, data released by the Federal Statistical Office showed Friday. The producer price index fell 0.5 percent year-on-year in August following a flat reading in July. On a monthly basis, the PPI fell 0.1 percent. Economists expected prices to remain unchanged on both counts.
The German construction sector expanded for the fifth straight month in September, but at a notably slower pace than in the previous month, figures released by Markit Economics revealed Friday. The seasonally adjusted purchasing managers' index (PMI) for the construction sector dropped to 52.1 in September from the seventeen-month high of 55.1 seen in August.
Passenger car sales in the United Kingdom increased for the nineteenth successive month in September, a report released by the Society of Motor Manufacturers and Traders (SMMT) showed Friday.
New car registrations increased 12.1 percent year-on-year to 403,136 units in September. "The September new car registrations figure was the highest monthly total since March 2008," SMMT Chief Executive Mike Hawes said.
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