LONDON (Dow Jones)--European stocks were mostly flat in thin holiday trade Wednesday but the euro was boosted by reports that China is ready to buy EUR4 billion to EUR5 billion of Portuguese debt.
Stock trading was lackluster as investors decided to square positions before the holiday break, but there was optimism that 2011 would be good for the asset class.
"We remain positive on the outlook for stocks in 2011, with a favorable macro backdrop, solid earnings and attractive valuations," said Prudential International Investments Advisers chief investment strategist John Praveen.
However, he acknowledged that euro-zone stocks remain under the shadow of the region's ongoing debt crisis.
By 1205 GMT, the Stoxx Europe 600 index was up 0.1% at 281.40, London's FTSE 100 index was 0.3% higher at 5969.90, Frankfurt's DAX was flat at 7077.70, and Paris's CAC-40 was also flat at 3927.59.
Corporate data were thin on the ground Wednesday. But in London, ARM Holdings shares leapt on reports that Microsoft is planning to introduce a version of Windows that runs on ARM chips from January 2011. The stock was up 8.3% at 436.90 pence.
Meanwhile, economic data from the U.K. did little to affect the direction of stocks or even sway gilts.
The final release of third-quarter U.K. gross domestic product data showed growth at 2.7% year-on-year, rather than 2.8%, and at 0.7% quarter-on-quarter rather than 0.8%. Meanwhile, the minutes of the latest meeting of the Bank of England's monetary policy committee again showed member Andrew Sentance voting for a 25 bps rate hike and Adam Posen voting for a GBP50 billion expansion of quantitative easing, as expected.
Attention will turn now to U.S. economic data releases, with revised third-quarter GDP data published at 1330 GMT, followed by November existing home sales figures at 1500 GMT.
Ian Harwood, chief economist at Evolutions Securities, said: "Optimism about the U.S. economic outlook has increased recently, and Wall Street economists have been hiking their 2011 GDP forecasts. In part, this upgrading is due to the flow of better-than-expected real-economy news."
At 1210 GMT, the Dow Jones Industrial Average and S&P 500 March futures contracts were both flat at 11,475 and 1251.10 respectively.
Earlier in Asia, share markets closed modestly higher overall in subdued trading, although buying in Japan was held back by weaker-than-expected export data, while bank stocks in China were hit by persistent worries about a further tightening of monetary policy by Beijing.
Japan's Nikkei Stock Average fell 0.2% but Australia's S&P/ASX 200 was up 0.1% and South Korea's Kospi Composite was 0.1% higher. The Shanghai Composite Index fell 0.9% while Hong Kong's Hang Seng Index rose 0.2%.
In the European foreign exchanges, the euro was helped by a report that China is prepared to buy Portuguese debt but still touched a new record low against the Swiss franc.
By 1215 GMT, the euro was trading at CHF1.2535 after moving as low as CHF1.2493 earlier in the day. The single currency also stood at $1.3147, up from $1.3101 in New York late Tuesday, while the dollar eased to Y83.56 from Y83.75.
Spot gold was at $1389.05 per troy ounce, up $3.40 from New York, while the February Nymex crude oil futures contract was up 43 cents at $90.25 per barrel. In the core sovereign-debt markets, the March German bund futures contract rose 0.20 to 125.37 in thin trading.
-By Andrea Tryphonides & Toby Anderson, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com
