Monday, May 21, 2012

Europe stocks inch up after G8 vague on Europe fix

A woman looks at an electronic stock indicator in Tokyo Monday, May 21, 2012. Bargain-hunting helped Asian stock markets edge upward Monday, but gains were limited as investors remained unconvinced that the world's major economies nailed a solution to the European debt crisis following a summit in Washington. Japan's Nikkei 225 index came off four-month lows to rise 0.3 percent at 8,636.89. (AP Photo/Shizuo Kambayashi)

A woman looks at an electronic stock indicator in Tokyo Monday, May 21, 2012. Bargain-hunting helped Asian stock markets edge upward Monday, but gains were limited as investors remained unconvinced that the world's major economies nailed a solution to the European debt crisis following a summit in Washington. Japan's Nikkei 225 index came off four-month lows to rise 0.3 percent at 8,636.89. (AP Photo/Shizuo Kambayashi)

A man looks at an electronic stock indicator in Tokyo Monday, May 21, 2012. Bargain-hunting helped Asian stock markets edge upward Monday, but gains were limited as investors remained unconvinced that the world's major economies nailed a solution to the European debt crisis following a summit in Washington. Japan's Nikkei 225 index came off four-month lows to rise 0.3 percent at 8,636.89. (AP Photo/Shizuo Kambayashi)

(AP) ? European stocks inched up Monday morning in spite of investors' lingering concerns that the G-8 leaders had failed to provide a concrete plan to solve the European debt crisis.

Traders both in Europe and Asia were kept on edge by worries about the economic future of Greece and whether it would exit the 17-country euro currency union.

"The defensive mood among market participants is unlikely to change soon," UniCredit said in a morning note, adding that the impending election in Greece will likely be the market driver over the next four weeks.

Anti-bailout political parties made gains in general elections in Greece earlier this month, but the ballot proved to be inconclusive. A new vote is scheduled for June 17, and the radical left party Syriza is expected to make gains. Without the rescue package, Greece will likely default and leave the eurozone. That would mean a financial disaster for Greece, but it will also send shockwaves throughout Europe.

At stake is a multibillion euro bailout that Greece urgently needs to stay solvent. International lenders have threatened to cancel the package if Greece fails to follow through on its austerity plans.

Britain's FTSE 100 index gained 0.5 percent at 5,294.67 points, Germany's DAX added 0.6 percent, to 6,311.85 while France's CAC 40 added 0.7 percent to 3,028.14.

A weekend summit in Washington among leaders of the world's most powerful nations provided little in the way of encouragement for investors already nervous about the political turmoil in Greece.

Leaders of the world's major economies issued a joint statement, but left the actual steps to individual countries to take.

"The G-8 statement offered little more than the usual papering cover the cracks with a series of good intentions, but no hint on concrete measures on growth or how they would be financed," Marc Ostwald, a London-based strategist at Monument Securities, said in a morning note to investors.

European officials signaled Monday that there's still no consensus among them about possible ways out of the European debt crisis. Germany's deputy finance minister said Monday that Berlin still opposes the new French president's idea to jointly issue bonds for the eurozone which could be used to fund economic growth. Germany argues that such bonds would lessen pressure for heavily indebted countries to get their financial house in order.

Leaders of the 27 European Union countries will hold an informal meeting in Brussels on Wednesday, followed by a summit at the end of June at which the issues of economic growth and austerity will likely be the main point of debate. Merkel said last week that "it will be very important that Germany and France present their ideas together at this summit."

Spanish stocks trailed behind other European indices as market are still reaction to last week's news that Spain's 2011 budget deficit was higher than expected. The benchmark IBEX 35 index was down by 0.3 percent at 6,543.6.

In Asia, markets also posted only muted gains as traders. Japan's Nikkei 225 index came off four-month lows to rise 0.3 percent at 8,636.89. Australia's S&P/ASX rose 0.2 percent to 4,055.90.

Mainland China's Shanghai Composite Index was 0.3 percent higher at 2,351.06. Benchmarks in Taiwan and India also rose. Singapore was mostly flat.

But Hong Kong's Hang Seng was down 0.3 percent at 18,893.53. Indonesia, Thailand and New Zealand benchmarks also fell.

Benchmark oil for June delivery was up 43 cents to $91.91 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.08 to settle at $91.48 in New York on Friday.

In currency trading, the euro rose to $1.2766 from $1.2737 late Friday in New York. The dollar rose to 79.21 yen from 79.08 yen.

___Pamela Sampson contributed to this report from Bangkok.

Associated Press

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