European Markets Advance 1.5%; Record Euro Zone Unemployment

Bikram Pandey
01 Oct, 2012
New York City

Financial markets across Europe gained after Spain was deemed to need less than previously expected in a bank bailout. However, the broader economic outlook in the region remained week as unemployment surged to a record high of 11.4%.

[R]2:20 PM Frankfurt – Financial markets across Europe gained after Spain was deemed to need less than previously expected in a bank bailout. However, the broader economic outlook in the region remained week as unemployment surged to a record high of 11.4%.[/R]

European markets traded higher after an independent audit of Spanish banks estimated lower than previously expected capital requirement. However, unemployment across the region rose for the third month in a row near the record levels.

Financial markets across the region traded higher on the assessment that the situation could have been worse in Spain.

In London, FTSE 100 index added 1.2% or 69.2 to 5,811; in Frankfurt, DAX index gained 1.3% or 95.1 to 7,311 and in Paris CAC 40 advanced 1.7% or 58.2 to 3,413.

Oliver Wyman, the New York based consulting firm in its final report said that Spanish banks need a total of 59.3 billion euro or $76 billion compared to its previous estimate of 62 billion euro in June.

The capital deficit at Spanish bank was determined based on the stress test that determined the capital requirement if Spain suffered three years of successive decline in economic output as required by the a group of European finance ministers to access a bailout of 100 billion euros.

Jobless rate in the euro zone of 17 nations increased to 11.4% in August according to the latest data released by the statistical agency Eurostat based in Luxembourg. In all, 18 million people are out of work in the currency union.

The agency also revised higher the rate for June and July to 11.4% from the previous record estimate of 11.3%. And the unemployment picture across the wider region of 27 nations was also beak.

In the European Union of 27 nations, the unemployment rate was unchanged at 10.5% in August from July and a total of 25 million people are looking for work.

The job market picture varied in the region with Austria reporting the lowest unemployment rate of 4.5% and Spain registering record 25.1%. Youth unemployment in the struggling nation was 52.9%, record high in the region.