Euro shares mixed in volatile trade; DAX off 0.26%

Investing.com - European stocks closed mixed in volatile trade Thursday, sentiment remained under pressure as sustained worries over the handling of Spain’s financial crisis weakened investor sentiment.

During European afternoon trade, the EURO STOXX 50 gave back 0.08%, France’s CAC 40 climbed 0.05%, while Germany’s DAX 30 dropped 0.26%.

Stocks found support amid expectations that Ireland would pass a vote for the European Union’s fiscal treaty in a referendum on Thursday.

In bearish equity news,  revised data indicated the U.S. economy grew at a slower rate than initially estimated during the first three months of 2012, with first quarter gross domestic product expanding by 1.9%, in line with expectations, down from an initial estimate of 2.2%.

Meanwhile, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to 383,000, defying expectations for a decline of 3,000 to 370,000.

A separate report showed that the U.S. private sector added 133,000 jobs in May, missing expectations for an increase of 148,000.

In addition, data showed that manufacturing activity in the Chicago area slowed significantly more-than-expected in May, falling to the lowest level since September 2009.

Elsewhere, official data showed Germany’s unemployment rate dropped to a record low of 6.7% in May, indicating that the euro area’s largest economy is weathering the effects of the debt crisis.

But ongoing worries over the situation in Spain, where mounting borrowing costs and the lack of a convincing plan to recapitalize nationalized lender Bankia fuelled fears that Madrid will be forced to seek an international bailout.

Uncertainty over the outcome of a second Greek general election also weighed after opinion polls showed that pro and anti-austerity parties were neck-and-neck ahead of the June 17 vote.

Financial stocks remained broadly higher, as shares in French lenders BNP Paribas and Societe Generale climbed 1.74% and 1.04%, while Germany’s Deutsche Bank and Commerzbank advanced 1.06% and 0.38% respectively.

Peripheral lenders also added to gains with shares in Spain’s BBVA rising 0.61%, while Italian lenders Intesa Sanpaolo and Unicredit gained 0.80% and 1.30%. 

Troubled Spanish lender Bankia remained lower, on the other hand, with shares dropping 4.76% as the European Commission pressured Spain’s government to lay out plans for the bank’s EUR19 billion recapitalization.

Meanwhile, shares in Spain’s largest phone company, Telefonica surged 2.18% after its board approved Wednesday a proposal to seek an initial public offering for O2 Germany, and to explore possible listings for its Latin American assets. 

In London, FTSE 100 advanced 0.18%, on data indicating that U.K. consumer confidence improved in May, while a separate report showed that house prices rose more-than-expected this month.

U.K. retailer Tesco was among the session’s top gainers, with shares surging 2.08%, after announcing earlier that it will assess the enthusiasm for its pop-up shop launched in London this week to encourage Londoners to use its online clothing site.

Financial stocks were also broadly higher, as shares in Lloyds Banking jumped 1.17% and HSBC Holdings advanced 1.11%, while the Royal Bank of Scotland climbed 0.30%.

Elsewhere, shares in Logica skyrocketed 64.54%, after Montreal-based CGI announced it had reached an agreement to buy the U.K. computer-services provider in a GBP1.7 billion cash transaction.

In the U.S., equity markets traded lower midsession. The Dow Jones Industrial Average gave back 0.08%, S&P 500 dropped 0.15%, while the tech heavy Nasdaq fell 0.38%.

Investors are anticipating the U.S. Non Farm Payrolls, the ISM report and German manufacturing numbers on Friday.