European stock markets inched higher on Friday as banks and miners generally gained ground, but still posted the biggest weekly loss of the year.
The Stoxx Europe 600 index edged up 0.1% to 265.65, ending a four-day losing streak. For the week, however, it lost 2.5%, its steepest weekly decline since mid-December.
“There have been some very disappointing PMI data in China and Europe, which have spurred concerns about global growth. We’re in a consolidating state and we need new catalysts to push us higher,” said Peter Garnry, equity strategist at Saxo Bank.
In a repeat of Thursday’s action, the Spanish stock market was among region’s worst-performing indexes, as banks declined again. BBVA fell 1.1%, Bankinter declined 1.3% and Banco Santander lost 1%. The IBEX 35 index fell 0.9% to 8281.80.
But yields on Spanish bonds fell a day after hitting their highest levels since January; the 10-year yield slid 0.09 percentage point to 5.38%.
Market sentiment has soured toward Spain after the government’s decision earlier this month to raise its 2012 fiscal deficit target, sparking comparisons to Greece. The government is to make a 2012 budget presentation next week, and a nationwide labor strike is expected as well.
“The problem with Spain is that it’s dependent on the regions in terms of the budget. So when Madrid tries to impose austerity measures, it can be hard to get the regions to comply, which makes it difficult to cut down the deficit,” Mr. Garney said.
Spanish Finance Minister Luis de Guindos sought to calm fears about his country. Speaking to reporters in Singapore, Mr. de Guindos said comparisons with Greece are “total nonsense” and that the government is committed to fiscal adjustment. He added that an additional €35 billion ($46.2 billion) of budget tightening will be required this year and next.
In the U.K. the FTSE 100 index added 0.2% to 5854.89. BT Group jumped 5.4% as it secured an agreement with the trustee of its pension plan that will cut its pension plan deficit by more than half .
Miners rose as they tracked a rally in commodity prices. Antofagasta added 2.7%,Kazakhmys gained 2.5% and Fresnillo firmed 2.4%.
Randgold Resources, however, dropped 2% as investors continued to shun the gold miner in the wake of a military coup in Mali, where the firm has operations. The stock tumbled 13% on Thursday because of the coup.
In France, banks helped the CAC 40 index creep up 0.1% to 3476.18. Crédit Agricole gained 3% and Société Générale rose 2.1%.
Car makers were also higher; Renault added 2.5%, while Peugeot advanced 2.3%.
In Germany, the DAX 30 index rose 0.2% to 6995.62. Volkswagen gained 1.7% and Daimler rose 1.6%. Banks rose here, too; Commerzbank jumped 3.2% and Deutsche Bank added 0.9%.