Europe midday: Stocks fall as investors wait on US budget

28th Dec 2012 11:10

European equities declined by the midday mark Friday as investors waited nervously for the US to reach a budget deal.President Barack Obama is meeting with leaders later to tackle measures to avoid more than $600bn in spending cuts and tax hikes. Republican House Speaker John Boehner is holding a separate meeting on Sunday. Time is running out with lawmakers desperately trying to come to an agreement before the end-of-year deadline. Investors are also closely watching Italy's last debt auction for the year, to be held Friday. The country plans to offer €3bn of five-year bonds and the same figure of 10-year paper in the first sale of longer-term debt to be settled in the New Year.The auction is expected to run smoothly after Rome had no difficulty in placing €11.75bn of short-dated paper on Thursday, aided by debt recoveries.Italy's Prime Minister Mario Monti held talks with centrist politicians Thursday over the agenda for reform. He is yet to confirm he will run for a second stint as leader in next February's analysts but it is looking more likely as he has received a strong backing. It would set the stage for a battle with his predecessor Silvio Berlussconi.Jobless rates impede French economy French President Francois Hollande is facing poor outlook for the country's economic growth in coming months as unemployment was reported at a 15-month high.Gross domestic product increased by 0.1% - according to Insee statistics institute in Paris on Friday - signalling a recovery that may be too weak to rescue the economy.Jobless numbers climbed to its highest point since January 1998 with data late Thursday revealing 3.13m claims for November. Porsche prices drive upPorsche reported an 6.4 % increase to €61.76, the highest price since January 2011, after it won a dismissal of a US lawsuit by 26 hedge funds, one of several legal actions over its purchase of shares in Volkswagen.Bankia fell to its lowest price since it sold shares to the public in July 2011. The shares dropped 24% to €41.7, after Spain said the lender had a negative value of €4.15bn.Video game maker Atari declined by 6.3% to €0.89 after it announced it expected a "significant" fiscal-year loss. The company is looking at its options for raising or preserving cash.European mining shares were among the top performers in the Stoxx 600. Kazakhmys rose 0.6% to 782.5p while Antofagasta advanced 0.8% to 1,362p.Brent crude fallsThe euro fell 0.45% to $1.3177 on Thursday.Front month Brent crude futures dropped by 0.090 to $110.700 on the ICE.