LONDON (Dow Jones)--European stock markets eased marginally Thursday as trading wound down ahead of the year end.
By 0835 GMT, the Stoxx Europe 600 index was down 0.2% at 280.03, The FTSE 100 index in London was down 0.1% at 5991.89, the DAX in Frankfurt was down 0.2% at 6984.92 and the CAC-40 in Paris was off 0.2% at 3881.40.
While some participants remain optimistic about the prospects for equities in the year ahead, others are not so sure. Market sentiment is overly bullish, complacency is extremely low and the market leaders appear to be tracing out intermediate-term tops, said Standard & Poor's Equity Research in a note to clients.
Nonetheless, S&P remains bullish longer term. "Even though a near-term digestion of recent gains is likely, in our opinion, we remain positive on equities in 2011. We see the U.S. economy continuing to recover gradually, and project S&P 500 earnings per share to rise 13.2%," it said
S&P added that China's economy will grow by 9% next year, as measures to tighten monetary policy succeed in bringing about a soft landing, while, in Europe, it sees strength in the northern economies largely offsetting austerity in the southern periphery.
Meanwhile, basic-resource stocks continued to post gains, shrugging off China's rate increase over the Christmas holiday weekend, with a rise in commodity prices helping. Three-month copper futures on the London Metal Exchange chalked up a fresh record price of $9550 per metric ton, more than $100 above the previous day's record-breaking $9447 high. In London, shares in Fresnillo rose 1.5%, while peer Antofagasta added 0.5%.
With little economic or corporate data due out in Europe, traders turned their attention to the U.S. for further direction, with initial jobless claims due at 1330 GMT, the Chicago purchasing managers' index at 1445 GMT and pending home sales at 1500 GMT.
On Wall Street Wednesday, stocks extended their strong December run, with the Dow Jones Industrial Average closing up 0.1%, at 11,585.38, its highest close since August 2008. Among other indexes, the Nasdaq Composite gained 0.1% to 2666.93 while the Standard & Poor's 500-stock index added 0.1% to 1259.78.
Volume was light thanks to the holidays and snow in the Northeast.
In the Asian markets Thursday, stocks were a little higher on Wall Street's positive finish. Australia's S&P/ASX 200 was up 0.3%, South Korea's Kospi Composite was up 0.4%, Hong Kong's Hang Seng Index added 0.1% and China's Shanghai Composite added 0.3%.
Japan's Nikkei Stock Average, however, was down 1.1%, weighed by falls in exporters' shares, which were dragged down by the yen's recent strength.
In the European foreign exchanges, the dollar was broadly lower as U.S. bond yields fell following strong demand at a seven-year Treasury auction, with the moves exaggerated by the thin market.
At 0855 GMT, the euro was trading at $1.3243, up from $1.3225 in late New York trading Wednesday. The dollar was at Y81.51, after earlier falling to Y81.28, its lowest level since Nov. 10, and down from Y81.62.
Elsewhere, the euro hit a new record low at 1.2398 Swiss francs.
Among other assets, spot gold was at $1414.00 per troy ounce, up $3.40 from New York, while the February Nymex crude oil futures contract was up five cents at $91.17 per barrel.
In the bond markets, March bunds rose 0.47 to 125.24, helped by the strong seven-year U.S. Treasury auction.
-By Ishaq Siddiqi, Dow Jones Newswires; +44-20-7842-9488; ishaq.siddiqi@dowjones.com
