Uncertainty over Syria pushes European stocks down

Sarah Dilorenzo, AP Business Writer
August 30, 2013
Syria uncertainty, unemployment push stocks down

An investor looks at the stock price monitor at a private securities company Friday, Aug. 30, 2013 in Shanghai, China. Asian stock markets were subdued Friday after Japanese manufacturing undershot expectations and worries about Syria's civil war dampened investor spirits. (AP Photo)

PARIS (AP) -- Uncertainty over a Syrian military intervention and a continued high unemployment rate drove European markets down on Friday.

Japan's index also fell after data showed manufacturing in the country was rebounding less strongly than expected.

"It still seems though that traders remain reluctant to take on significantly new positions ahead of the long weekend in the U.S., especially so when there remains so much uncertainty in the air, and we are at the end of the week and the month," said Michael Hewson, an analyst at CMC Markets UK, referring to the upcoming Labor Day holiday on Monday.

On Thursday, lawmakers in the U.K. refused to authorize a British military intervention in Syria after an alleged chemical weapons attack near Damascus killed more than 300 civilians earlier this month. The surprise no-vote — which came after momentum seemed to be building inexorably toward military action — left uncertainty as to whether the U.S. and France would go ahead.

In morning trading in Europe, France's CAC-40 fell 0.5 percent to 3,968, while the DAX in Germany pulled back 0.6 percent 8,146. The FTSE index of leading British shares dropped 0.4 percent to 6,455.

Part of those declines were due to the release of data that showed the unemployment rate across the 17 nations using the euro stuck at its record high of 12.1 percent in July. The European Union rate of 11 percent also held steady.

Earlier in Asia, the Nikkei 225 index closed down 0.5 percent at 13,388.86. But gains were posted elsewhere in Asia. Hong Kong's Hang Seng rose 0.2 percent to 21,668.90. South Korea's Kospi gained 1 percent to 1,926.36. Australia's S&P/ASX 200 added 0.8 percent to 5,135.

Manufacturing in the world's No. 3 economy rose 1.6 percent in July from a year earlier and 3.2 percent from the month before. While that pointed to an economic recovery, analysts had expected to see a 3.6 percent increase.

Wall Street, meanwhile, looked set for a stronger open. Dow Jones industrial futures were up slightly 0.1 percent to 14,856, while futures in the broader S&P 500 were 0.2 percent to 1,640.

Energy prices, meanwhile, continued to retreat from a two-year high.

Benchmark oil for October delivery was down 94 cents to $107.86 per barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro was flat at $1.3237.

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Associated Press Business Writer Pamela Sampson contributed to this report. Follow Sampson on Twitter at http://twitter.com/pamelasampson