European stocks enjoy pre-Christmas gains

LONDON (AFP) - European stock markets rose in shortened trading sessions on Tuesday, as investors brushed aside news of shrinking growth in France.

London's benchmark FTSE 100 index climbed 0.33 per cent to 6,700.55 points in late morning deals. In Paris, the CAC 40 gained 0.24 per cent to 4,225.50 points compared with Monday's closing value.

Both indices were to end trading early afternoon ahead of the festive break.

Frankfurt's DAX 30 was shut on Tuesday, a day after closing up 0.94 per cent at a record-high 9,488.82 points.

The one notable official data release from Europe on Tuesday showed that France's economy contracted 0.1 per cent in the third quarter. Statistics body INSEE though indicated that the eurozone country should dodge recession by growing at the end of 2013.

Businesses were meanwhile being affected Tuesday by storms across Britain and France.

"Given retailers' hopes that the last couple of days before Christmas would see a final strong surge in sales, the awful weather could not have come at a worse time," said Howard Archer, chief UK & European economist at consultants IHS Global Insight.

"The very wet and windy weather must have had a significant dampening impact on shopper footfall," he added on Tuesday.

In foreign exchange trading, the European single currency fell to US$1.3678 (S$1.73) from US$1.3695 late in New York on Monday.

The euro slipped to 83.67 pence from 83.72 pence. The British pound dropped to US$1.6348 from US$1.6352.

Gold climbed to US$1,201.27 an ounce from US$1,199 Monday on the London Bullion Market.

Asian stock markets extended gains on Tuesday following another record-breaking close on Wall Street, with Japan's Nikkei tapping a six-year closing high as the dollar renewed its upward trend against the yen.

Chinese shares enjoyed a second day of buying, although there are still lingering fears about a liquidity crisis despite a cash injection from the country's central bank.

On Wall Street the Dow and S&P 500 closed Monday at all-time highs yet again after fresh Commerce Department data pointed to a 0.5 per cent increase in US consumer spending in November, the second month in a row to see a rise.

An estimate of consumer confidence by the University of Michigan also showed an improvement in December.

The news added to a run of recent figures showing a pick-up in the US economy - including data on unemployment and economic growth - indicating it is well on the road to recovery.

And last week the Federal Reserve gave it a vote of confidence as it said it would from January reduce its stimulus programme by US$10 billion to US$75 billion a month.