Global stocks struggle to gain footing in new year

The Associated Press

LONDON (AP) — European and U.S. stocks edged higher on Friday, recovering from a bad first day of the year, while Asian markets closed lower.

Major indexes closed out 2013 at or near record highs, but investors seem more cautious about chasing gains in the new year. That was exacerbated by the low level of trading volumes, which was due both to the fact that many investors won't be back from the holidays before Monday as well as the winter storm hitting the U.S. east coast.

In Europe, Britain's FTSE 100 rose 0.2 percent to close at 6,730.67 while Germany's DAX advanced 0.4 percent to 9,435.15. France's CAC-40 added 0.5 to 4,247.65.

Wall Street lack momentum, with the Dow up barely 0.1 percent at 16,450.11 and the S&P 500 flat at 1,830.15.

Analysts say stocks were bound to pull back or at least take a breather after higher corporate profits and Fed stimulus caused a sharp rally in the second half of 2013.

Market sentiment has been dented also by two surveys showing manufacturing activity in China, the world's second-largest economy, weakened in December.

China's benchmark Shanghai Composite Index shed 1.2 percent to 2,083.14, adding to the previous day's 0.3 percent loss

"We expect the upcoming set of data releases to show China's economy losing steam in December," said UBS economist Tao Wang in a report.

Looking ahead, markets will focus on comments later Friday by U.S. Federal Reserve Chairman Ben Bernanke for indications about the possible pace of further reductions in monetary stimulus.

Elsewhere in Asia, Tokyo was closed for the last day of its New Year's break. South Korea's Kospi gave up 1.1 percent to 1,946.14 after Hyundai Motor Co. and Kia Motors Corp. said they expect sales growth in 2014 to be their weakest in a decade.

Hong Kong's Hang Seng tumbled 2.3 percent to 22,804.1. India's Sensex shed 0.7 percent to 20,754.6. Benchmarks in Singapore, Bangkok, Malaysia and Jakarta also declined. New Zealand bucked the trend to add 0.6 percent to 5,134.97.

In currency markets, the U.S. dollar shed 0.3 percent against the Japanese yen, to 104.48 yen. The euro was down 0.5 percent at $1.3601.

Benchmark oil for February delivery fell 98 cents a barrel to $94.45 in electronic trading on the New York Mercantile Exchange. The contract plunged $2.98 the previous day to settle at $95.44.