LONDON (ShareCast) - European equities were generally down on Friday as anxiety over a euro area recession in 2012 held sway.

The negative movements in Europe occurred despite the new Italian Prime Minister, Mario Monti, winning a confidence vote in the lower house of the Italian Parliament.

French Finance Minister, Francois Baroin, today declared that it's economically "better to be French than British". The comments follow a comparison of the fundamentals of the UK and France’s economy by the head of the Banque de France, Christian Noyer. France is facing a possible credit rating downgrade.

Spain and Italy are also rumoured to be potential targets for a ratings downgrade.

MACRO NEWS

INSEE’s French business confidence index for the month of December has come in at 94 points, versus 96 the month before (Consensus: 93).

Spanish labour costs rose by 1.5% on the prior year in the third quarter.

The well regarded KoF Swiss Economic Institute has cut its 2012 gross domestic product forecast for Switzerland to 0.2% from 1.5%.

The Italian current account deficit narrowed in October to €2.489bn from €3.53bn the month before.

The rate of growth in the Eurozone’s labour costs retreated in the third quarter to 2.7% on the prior year from 3.3%.

The Eurozone trade surplus came down in October to €1.1bn (consensus: €1.0bn) after €2.9bn the month before.

SECTORS

On the Stoxx 600 index, which provides a broad cross section of the European economy, the biggest fallers were

Technology: -1.86%
Personal & Household Goods: - 1.29%
Automobiles and Parts: -1.27%

COMPANIES

German software firm SAP fell after reports it is putting away its cheque book for the near future and plans no new acquisitions.

In Italy, tyre maker Pirelli lost traction while French rival Michelin also dropped on concerns over the car sector.

OTHER MARKETS

At 18:11 in Frankfurt one euro was worth $1.3026, still holding onto resistance at around $1.30 and up 0.1 basis points on the fix.

Brent Crude for January delivery fell 0.65% on last night’s fix in London, to hit $102.93

The February gold future contract rose 0.89% to $1,591 an ounce.


BS

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