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Stock gains limited by US fiscal cliff uncertainty

Published on NewsOK Modified: November 30, 2012 at 9:43 am •  Published: November 30, 2012
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LONDON (AP) — Uncertainty over whether U.S. leaders can resolve a critical budget deadlock and figures showing the unemployment rate across the 17-country eurozone at a record high kept a lid on markets Friday.

However, most stock indexes looked like they would be ending what's been another fairly strong week ahead. Investor sentiment had been buoyed this week by upbeat reports on the U.S. economy, including economic growth and consumer confidence, as well as a sense that U.S. politicians were making progress in the discussions over the budget.

The two sides need an agreement to avoid the so-called fiscal cliff of spending cuts and tax increases due to start Jan. 1 unless a deal is reached to cut the budget deficit. Failure to resolve the issue could push the U.S. economy, the world's largest, back into recession and seriously impact on global growth.

Republican House Speaker John Boehner on Thursday rebuffed a proposal by President Barack Obama because it lacked "sensible spending cuts." The tenor of the remarks suggested the hard bargaining was about to begin.

"Market swings this week have largely been due to the posturing of U.S. politicians as they battle for soundbites over the two parties' efforts to agree a cohesive plan of action in tackling the fiscal cliff," said Alastair McCaig, market analyst at IG.

By early afternoon in Europe, Britain's FTSE 100 was 0.4 percent higher at 5,894 while Germany's DAX rose 0.4 percent to 7,432. France's CAC-40 gained 0.4 percent to 3,582.

European markets were supported by news that the German parliament approved the latest bailout deal for Greece, which cuts the country's debt burden and gives it new rescue loans. However, optimism was blunted by new statistics showing unemployment in the 17 EU countries that use the euro rose to a record high of 11.7 percent in October.

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