LONDON - European stock markets rose Friday, helped by a late rally on Wall Street overnight, while the euro headed towards $1.30 for the first time in over three months amid mounting concerns about the pace of the US economic recovery. In Europe, the FTSE 100 index of leading British shares was up 44.98 points, or 0.9 per cent, at 5,256.27 while Germany's DAX rose 26.95 points, or 0.4 per cent, to 6,176.31. The CAC-40 in France was 18.34 points, or 0.5 per cent, higher at 3,600.16. Wall Street was poised for a subdued opening despite Thursday's late rally, which limited the damage from a pair of extremely disappointing US manufacturing surveys - Dow futures were down 21 points, or 0.2 percent, at 10,271 while the broader Standard & Poor's 500 futures fell 0.9 point, or 0.1 per cent, to 1,089.50. Mitul Kotecha, an analyst at Credit Agricole, said stock markets around the world have been saved "from too much of a beating" by the release of better than expected earnings from JP Morgan Chase & Co. as well as the $550 million agreement between Goldman Sachs Group Inc. and regulators to settle civil fraud charges and news from BP PLC that it has temporarily stemmed the flow of oil from the leak from its Gulf well. Earnings will be a focus later, with Bank of America Corp., Citigroup Inc. and General Electric Co. all publishing their latest quarterly results, but US economic figures will also feature strongly. The recent raft of downbeat US data has had a big impact in the currency markets, where the euro continues to make a concerted effort to break through the $1.30 mark for the first time since May 4. By late-morning London time, the euro was 0.4 per cent higher at $1.2972, just below its intraday high of $1.2983. The euro has advanced over 10 cents against the dollar since hitting a four-year low of $1.1878 in early June on a combination of easing worries over Europe's sovereign debt crisis and concerns about the US economic recovery. Soft retail sales and manufacturing data this week have further fueled those concerns. Investors will be focusing on US consumer price inflation data for June to see if any slowdown is being seen in price levels. Lower inflation could be indicating subdued economic activity, which would further reduce expectations that the US Federal Reserve will be raising interest rates anytime soon. "The big fear will be that the CPI data later in the session could well come in lower than expected and yet again send investors running, worried of a slowdown in the US economic recovery," said James Hughes, market analyst at CMC Markets. Earlier in Asia, Japan's benchmark Nikkei 225 stock index lost 277.17 points, or 2.9 per cent, to 9,408.38, its biggest drop since June 7, amid concerns that the rising value of the yen will hurt Japanese exporters. By late-morning London time, the dollar was down a further 0.2 percent at 87.25 yen. "The Nikkei lost 2.9 per cent with the impact of yen strength on exporters worrying investors ahead of a three day weekend in Japan," said Jane Foley, research director at Forex.com. South Korea's Kospi shed 0.7 per cent to 1,738.45, Australia's S&P/ASX 200 was down 0.5 per cent at 4,422.70 and Hong Kong's Hang Seng index rose 0.06 per cent to 20,267.87. Shanghai's Composite Index was steady at 2,424.27 after China said Thursday its gross domestic product expanded by 10.3 per cent in the second quarter from a year earlier, down from 11.9 per cent growth in the first quarter. Benchmark crude for August delivery was up 14 cents to $76.76 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
