LONDON (Dow Jones)--European stocks were mixed as news that European Union leaders have reached agreement on the treaty changes required to establish a 'permanent crisis mechanism' in 2013, and a rise in the euro, were offset by persistent concerns about European sovereign debt. While Germany's Ifo index added to the evidence of robust growth there, the survey failed to wipe out totally the impact of earlier news that Moody's Investors Service has downgraded Ireland's foreign- and local-currency government bond ratings by five notches to Baa1 from Aa2. The outlook on the Baa1 rating is negative. EU leaders at the Brussels summit agreed that the new mechanism will replace the current temporary European Financing Stability Facility and may include private-sector involvement, which implicitly means debt restructuring will be possible. However, some traders were not optimistic. "We will continue to watch the EU summit today in hope (rather than expectation) of an announcement that will spare a return to full-on crisis across the euro zone in the New Year," said Kenneth Broux at Lloyds Bank. "We believe the minor changes already communicated will be insufficient to address concerns that will be exacerbated by a return to full funding across euro-zone governments in the New Year." By 0920 GMT, the Stoxx Europe 600 index was down 0.1% at 277.30. But London's FTSE 100 was up 0.1% at 5885.26, Frankfurt's DAX was up 0.1% at 7029.26 and Paris's CAC-40 was up 0.3% at 3898.77. Dow Jones Industrial Average futures for March delivery were almost flat at 11,436; Standard & Poor's 500 futures for the same month were also little changed at 1239.00. The Ifo report showed a rise in the business climate index to 109.9, above the forecast 109.4. Earlier in Asia, stock markets were mixed, with Taiwan's market rising to a fresh 31-month high on continued fund inflows while China remained on the back foot on persistent concerns over further tightening measures from Beijing. Japan's Nikkei Stock Average closed down 0.1% and Australia's S&P/ASX 200 was down 0.4% but South Korea's Kospi Composite ended up 0.8%. Hong Kong's Hang Seng Index was up 0.2% and Taiwan's main index ended up 0.4% but the Shanghai Composite index was off 0.4%. U.S. stocks hit fresh two-year closing highs Thursday after generally upbeat economic data. The Dow Jones Industrial Average finished up 0.4% at 11,499.25, its highest closing level since Sept. 8, 2008. The Standard & Poor's 500-stock index rose 0.6% to 1242.87, reaching its highest closing value since Sept. 19, 2008, and the technology-oriented Nasdaq Composite gained 0.8% to 2637.31, its 10th gain in the past 12 trading sessions. In the European foreign exchanges, the euro was firmer despite Moody's Irish downgrade. At 0930 GMT, the euro was trading at $1.3333, up from $1.3244 at the Thursday New York close, while the dollar traded at Y83.79, down from Y83.92. Elsewhere, spot gold was at $1376.65 per troy ounce, up $8.65 from its level late in New York Thursday, while the January Nymex crude oil futures contract was 33 cents higher at $88.73 per barrel. Moody's decision to cut Ireland's rating helped the core European sovereign debt markets Friday, with the rush to safety resulting in the benchmark March bund contract pushing 0.46 higher at 124.33. -By Toby Anderson, Dow Jones Newswires; +44-20-7842-9352; toby.anderson@dowjones.com

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