European stocks rebound slightly

to 5 790,30 points in late morning deals and after official data showed Britain’s recession-hit economy shrank less than thought in the second quarter.
Frankfurt’s DAX 30 climbed 0,50 percent to 7 312,60 points and in Paris the CAC 40 gained 0.78 percent to 3 441,56.
Madrid’s IBEX 35 index was flat a day after it plunged almost 4 percent in value.
In foreign exchange trade, the euro stood at US$1,2870, unchanged from the level late in New York on Wednesday. Gold prices climbed to US$1 756,25 an ounce on the London Bullion Market from US$1 744,75 on Wednesday.
“After what felt like a very ominous trading session yesterday, markets have rebounded ever so slightly, but have looked increasingly fragile” as the day progresses, said IG Index trader Will Hedden.
“Much focus is on the Spanish budget and overall the market looks unconvinced for their prospects.”
European equities had tumbled on Wednesday on heightened concerns over a full bailout of debt-plagued Spain, and amid falling confidence in the US Federal Reserve’s latest stimulus plan, traders said.
They recovered a little in initial deals on Thursday after Asian stock markets closed higher but dealers there said gains were capped as fears over Spanish and Greek debt returned to the fore.
With violent anti-austerity protests breaking out on the streets of Madrid and Athens, concerns continued to mount that the market euphoria from this month’s US and European Central Bank stimulus announcements had evaporated.
Spain’s government was yesterday set to pass its 2013 austerity budget, with 39 billion euros (US$50 billion) in savings, including an anticipated third straight year of salary freezes for civil servants.
The budget, to be followed by the release of an audit of Spain’s sickly banking system, is seen by markets as one of the final acts before a sovereign bailout.
Prime Minister Mariano Rajoy’s right-leaning Popular Party government has already accepted a eurozone rescue loan for the banks of up to 100 billion euros.
If the Spanish cabinet adopts a budget with labour market and other key reforms sought by the IMF and European Union, Madrid could be a step closer to a broader bailout.
Europe’s main stock markets meanwhile had a lift yesterday from solid gains in Shanghai, where there were hopes the Chinese government would soon announce fresh easing to boost the economy after a string of weak data. — AFP.