European Markets Finished With Mixed Results Friday

(RTTNews) - The European markets ended Friday's session with mixed results, although the overall trading week was largely positive. Investors continued to be encouraged by the statements made by Federal Reserve Chairman Ben Bernanke late Wednesday. The situation in Portugal remains a concern after the country's President rejected an agreement between the ruling coalition and the opposition party on Thursday and called for early elections. Concerns over China also served to limit the upside.

China's economic growth may slow further to 7 percent this year, but there will not be a hard landing, Finance Minister Lou Jiwei reportedly said in Washington on Thursday. The estimated growth rate is lower than the government target of 7.5 percent.

Attending a two-day China-U.S. Strategic and Economic Dialogue, Lou said the slower growth rate is the result of China's economic restructuring. However, the 7 percent forecast should not be considered as the bottom line, Xinhua news agency said citing Lou's remarks at the event.

Standard & Poor's affirmed the 'AAA' credit rating of Germany as the largest euro area economy demonstrated ability to absorb huge economic and financial shocks.

In a report published on Friday, the agency said the outlook on the long-term rating remains stable, reflecting the assessment that Germany's public finances and strong external balance sheet will continue to withstand potential financial and economic shocks.

Standard and Poor's on Friday lifted its credit rating outlook on Ireland to 'positive', citing the scope of the country over-achieving its fiscal targets due to sustained budgetary consolidation. S&P affirmed sovereign credit ratings on Ireland at 'BBB+'. According to S&P, Ireland's general government debt as a percentage of GDP will fall more rapidly than earlier estimated.

The upward revision to outlook from 'stable' to 'positive' indicates that there is a more than one-in-three chance of rating upgrade over the coming two years, S&P said.

European Central Bank Vice President Vitor Constancio said Friday that Europe may face a long period of slow growth and that monetary policy in the region has to stay accommodative for longer than in the U.S.

"Advanced economies, Europe in particular, face a long period of slow growth that will test the quality of our institutions," Constancio said during a speech at the Official Monetary and Financial Institutions Forum in Singapore.

The euro area is still facing a painful crisis of imbalances, financial fragmentation and low growth, he said. The region needs to address questions of excess inequalities and high unemployment, the policymaker added.

European Central Bank Chief Economist Peter Praet said that he feared a possible overloading of the central bank as there are only a handful of effective institutions in euro area to handle the debt crisis.

"The Eurozone has been established with a few effective institutions," Praet said in an interview to Handelsblatt, which was published on Friday. "For that, we are now paying the price."

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.36 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.05 percent.

The DAX of Germany climbed by 0.66 percent and the FTSE 100 of the U.K. rose by 0.02 percent. The CAC 40 of France fell by 0.36 percent and the SMI of Switzerland lost 0.04 percent.

In Frankfurt, Gagfa gained 2.98 percent. Berenberg upgraded the stock to ''Buy'' from ''Hold.''

Commerzbank downgraded Aixtron to ''Hold'' from ''Add.'' The stock finished up by 1.99 percent.

In Paris, Alcatel Lucent increased by 0.90 percent. Goldman Sachs upgraded the stock to ''Neutral'' from ''Sell.''

Schneider Electric declined by 4.06 percent, after making an offer for UK's Invensys.

Air Liquide dipped by 0.38 percent, following a broker downgrade.

In London, Prudential climbed by 0.72 percent, while Legal & General fell by 1.53 percent. Nomura upgraded Prudential to ''Buy'' from ''Reduce,'' but downgraded Legal & General to ''Neutral'' from ''Buy.'' Resolution, which was upgraded to "Neutral" from "Reduce," rose by 3.41 percent.

Royal Bank of Scotland increased by 0.13 percent. Standard Chartered and Lloyds added 0.86 percent and 2.23 percent, respectively.

Barclays closed up by 1.07 percent, after Numis reduced its rating on the lender.

Alumasc Group surged by 15.94 percent. The company now sees full year underlying pre-tax profit above view.

Eurozone industrial production reversed the growth trend in May, casting doubt over the ability of the sector to support a sustained economic recovery. Production declined for the first time in four months, down 0.3 percent month-on-month in May, reversing April's 0.5 percent rise, data from Eurostat showed Friday. The May outcome was in line with expectations.

A leading indicator of the British economy recorded further increase in May, signaling that the ongoing recovery is sustainable, a survey by the Conference Board showed Friday. The slower rise, however, suggests that economic growth is unlikely to strengthen in the coming months.

The Conference Board leading economic index increased 0.4 percent month-on-month to 105 in May, after gaining 0.2 percent in April and 0.7 percent in March. Five of the seven components that constitute the leading index made positive contributions.

The volume of output in the British construction sector continued to decline in May, and at a faster rate than in the previous month, latest figures from the Office for National Statistics showed Friday. The seasonally adjusted construction output fell 4.8 percent on an annual basis in May, which was notably faster than the 2.3 percent fall seen in April. The sector recorded contraction for the seventeenth successive month.

With energy prices showing a substantial increase, the Labor Department released a report on Friday showing that U.S. producer prices rose by more than expected in the month of June.

The Labor Department said its producer price index rose by 0.8 percent in June following a 0.5 percent increase in May. Economists had been expecting the price growth to match the increase seen in the previous month.

Consumer sentiment in the U.S. has seen a modest deterioration in the month of July, according to a report released by Thomson Reuters and the University of Michigan on Friday.

The report showed that the consumer sentiment index dipped to 83.9 in July from the final June reading of 84.1. Economists had expected the index to come in unchanged compared to the previous month.