European Markets Lower ahead of Wall Street Return

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LONDON – European stock markets fell modestly Friday on some profit-taking and ahead of an expected lower opening on Wall Street following the Thanksgiving holiday. Asian stock markets rose despite the terrorist attacks in Mumbai.

The FTSE 100 index of leading British shares was down 10.14 points, or 0.2 percent, at 4,226.07, while Germany's DAX was 40.24 points, or 0.9 percent, lower at 4,625.03. The CAC-40 in France was 35.39 points, or 1.1 percent, lower at 3,215.00.

Europe's indexes have enjoyed one of their best weeks in months as some appetite for risk-taking was renewed by the U.S. government's rescue of Citigroup Inc., economic stimulus plans around the world and further measures from the Federal Reserve to boost bank lending.

U.S. stock index futures were lower as the markets return following Thanksgiving, though trading volumes were expected to be extremely light with many traders staying away until Monday.

Dow futures were down 22 points, or 0.5 percent, at 8,658, while the broader Standard & Poor's futures were down 5.6 points, or 0.6 percent, at 881.90.

Traders in New York will be closely watching indications of retail sales on Friday across the United States. The day after the Thanksgiving holiday is traditionally one of the biggest shopping days of the year. With the U.S. economic slump, the upcoming Christmas sales period is not expected to be particularly good for retailers.

"Often considered the busiest shopping day of the year, close attention will be paid to the numbers, given the current retail climate and any disappointment here could have some wide reaching effects as next month's trade gets underway," said Matt Buckland, a dealer at CMC Markets.

In Asia earlier, the attacks in Mumbai and the shutdown of Bangkok's airports by anti-government protestors did little to dampen improving investor sentiment.

Instead, investors were hopeful that a raft of policy measures around the world, such as Washington's rescue of Citigroup Inc. and China's rate cut and multibillion dollar stimulus plan, would limit the scale of the global downturn next year.

"The market is reacting very calmly to the terrorist attack," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "Investors in Hong Kong are still fixated on China's huge reduction in interest rates. There's bargain-hunting across the board."

India's stock market gained Friday, a day after trading was suspended due to deadly terrorist attacks in the country's financial capital.

The Sensex Index climbed 66 points, or 0.7 percent, to close at 9,092.72. The benchmark opened down more than 1 percent and then fluctuated in and out of positive territory before finishing higher.

Trading on the Bombay Stock Exchange was closed Thursday after suspected Muslim militants staged coordinated attacks across Mumbai, India's financial capital, killing at least 143 people. The exchange is located in Mumbai.

Hong Kong's Hang Seng index rose 336.18 points, or 2.5 percent, to 13,888.24 — a gain of 9.7 percent for the week. Japan's Nikkei 225 index climbed 1.7 percent to 8,512.27 — an advance of 7.6 percent for the week.

Australia's benchmark S&P/ASX200 index surged 4.3 percent, while South Korea's benchmark rose 1.2 percent.

Thai stocks also rose amid speculation that the intensifying political unrest could be resolved over the weekend. Protesters wanting to unseat the prime minister have taken over Bangkok's two main airports, disrupting travel and shipments around the region. The main SET index jumped 3.1 percent to 401.84.

The only major Asian market to decline was mainland China, where the Shanghai Composite index fell 2.4 percent. But the index rose 8.2 percent for the month of November, its biggest one-month gain in 15 months, driven by optimism about the government's stimulus package.

Oil prices fell below $54 a barrel as investors eyed a possible production cut by OPEC this weekend amid a gloomy global demand outlook. Light, sweet crude for January delivery was down $0.87 to $53.57 a barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the dollar dipped 0.1 percent to 95.26 yen, while the euro fell 0.8 percent to $1.2794 after a sharper than anticipated decline in inflation and a rise in joblessness in the 15-nation euro-zone.

Official figures showed the annual inflation rate sinking to 2.1 percent in November from 3.2 percent in October. The data stoked market expectations that the European Central Bank may reduce its key interest rate from 3.25 percent by more than the half percentage point currently anticipated at its meeting next week.