European shares rose on Thursday, ahead of a European Union meeting to help heavily indebted Greece as investors focus on sovereign debt concerns. European Union leaders will hold a two-day summit, divided over how to help Greece and maintain confidence in the euro. Focus on sovereign debt problems is likely to persist, after a Fitch downgrade of Portugal's debt rating on Wednesday and a pledge by Dubai's government to support the restructuring of debt-laden state-owned firms Dubai World and Nakheel by providing USD9.5bn in new funding. "The Greek problem hasn't gone away and you have got the Portugese downgrade reminding us that some economies are still vulnerable. The Greek problem would affect markets more if it spread significantly to Spain. That would be the bigger worry," said Bernard McAlinden, investment strategist at NCB Stockbrokers.
Britain's leading shares were flat in early afternoon trade on Wednesday, little impacted by a UK budget that held few surprises. "He (Alistair Darling) has reiterated measures that are aimed at cutting the deficit but stocks and sterling are generally unchanged and I don't think there's anything in the budget that requires action to investors," said Joshua Raymond, market strategist at City Index.
German business confidence surged this month, the Ifo institute said on Wednesday, as a weaker euro boosted export prospects and winter's end paved the way for a resumption of consumer spending and construction. Government stimulus measures put in place to combat last year's recession have also helped keep a lid on unemployment, which held steady at 8.2 percent last month. The German economy, Europe's largest, will resume expansion in the second quarter after the coldest winter in 14 years curbed activity in the first, the Bundesbank said earlier this week.
