Investors Hold Back from Major Transactions

Investors in European stock markets held back from major transactions on Friday due to the shortened trading day in the U.S. for the holiday and the anticipation of a decision regarding the disbursement of frozen aid to Greece.

The London FTSE rose by 0.09 percent to 5,796 points, the Frankfurt DAX increased by 0.07 percent to 7,249 points, while the Paris CAC was down by 0.01 percent at 3,497 points. Trading was relatively weak today due to the shortened trading day in the United States following Thanksgiving.

“Given the currently low trading volume and the fact that the U.S. is operating on a shortened schedule today, I do not expect significant growth in the stock market by the end of the day,” explains Brenda Kelly from IG. Even the unexpected improvement in Germany’s business climate in November after six months of deterioration did not significantly lift stock indices, although markets surged ahead of the release of the German Ifo Institute report.

A decision from international lenders regarding the disbursement of frozen aid to Greece is also awaited on Monday, when another meeting of Eurozone finance ministers and the head of the International Monetary Fund (IMF) is scheduled.

On Friday, a senior Greek government official stated that international lenders had reached an agreement on new measures for further reduction of Greek debt, but that an additional €10 billion still needs to be secured to obtain IMF approval.

Among the few company news, a report from German media highlighted that the German government will purchase three percent of shares in the European aerospace group EADS from Paris. This would mean that Germany will buy only 1.5 percent of shares from Daimler, which owns 22.5 percent of EADS, less than expected. Following the announcement of this report, EADS shares weakened by 1.5 percent.

“In that case, Daimler will have to sell shares on the market, which puts pressure on their price as it is a large package,” explains one trader. The Tokyo Stock Exchange’s Nikkei index rose by 1.56 percent to 9,366 points.