A Look At Economic Developments Around The Globe

A look at economic developments and stock market activity around the world Friday:
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LONDON — European stock markets fell sharply after disappointing U.S. consumer confidence figures reined in investor optimism about the speed and scale of any recovery in the world's largest economy. In Europe, the FTSE 100 index of leading British shares closed down 41.49 points, or 0.9 percent, at 4,713.97 while Germany's DAX fell 92 points, or 1.7 percent, at 5,309.11. The CAC-40 in France declined 29.12 points, or 0.8 percent, to 3,495.27.
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LONDON — The surprising news that France and Germany grew in the second quarter has reinforced talk that countries that avoided consumer debt sprees and depend less on the financial sector will emerge from recession sooner. Europe's two biggest economies each saw growth of 0.3 percent from the previous three-month period, confounding analysts' expectations for equivalent declines and technically ending their worst recession in decades. Economists and government officials are warning against early celebrations. But France and German nonetheless made a sharp turnaround from the previous quarter, when Germany shrank by a massive 3.5 percent and France contracted by 1.3 percent.
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MADRID — Spain's economy shrank by 1 percent in the second quarter compared with the previous three months, the government reported, indicating the country is still mired in recession and not showing the signs of recovery of fellow EU members France and Germany. It was the fourth consecutive quarterly contraction of a once-robust economy and was due principally to a continuing decline in consumer demand, offset somewhat by exports, the National Statistics Institute said. Compared with a year earlier, the economy shrank 4.1 percent in the second quarter. In less than two years, Spain has gone from being a European model for growth, creating more than one-third of all euro zone jobs to one with 4.13 million people out of work and Europe's highest unemployment rate at 17.9 percent. A boom fueled by housing construction and consumer spending have collapsed over the past two years.
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HONG KONG — Hong Kong's economy broke out of a yearlong recession in the second quarter as the territory benefited from strong growth in mainland China and better conditions in the West, the government said. The pickup adds to the list of economies in Asia and beyond to emerge from recession or shrink at a less-dismal pace since the banking crisis sent global production and demand plunging last year. Both Germany and France resumed growing last quarter. The southern Chinese territory's economy, slammed four straight quarters by free-falling world demand for exports, grew by 3.3 percent on a seasonally adjusted quarter-to-quarter basis, the government said. The economy contracted 4.3 percent in the first quarter.
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MOSCOW — German Chancellor Angela Merkel will meet with Russian President Dmitry Medvedev in a visit expected to include Kremlin pressure for Germany to attract other countries to a Russian gas pipeline project. Germany is Russia's key partner in the Nord Stream project, a pipeline to deliver Russian gas under the Baltic Sea directly to Europe. An increasing number of Germany's EU neighbors have raised environmental concerns about the project and say that the pipeline would tighten Europe's dependence on Russia for gas. In the wake of this year's dispute between Ukraine and Russia that resulted in a two-week suspension of Russian gas to much of Europe, concern about Russia's reliability has risen. The Kremlin is likely to push Germany to boost its backing of Nord Stream. The meeting will take place at the presidential residence in the Black Sea resort city of Sochi.
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TOKYO — Japanese shares rose to a fresh 10-month high as more signs emerged that the global economic downturn may have hit bottom. The benchmark Nikkei 225 stock average gained 0.8 percent, or 80.14 points, to 10,597.33, its second straight daily gain. The broader Topix index closed up 0.53 percent, or 5.16 points, at 973.57. Shares climbed on news that Germany and France, Europe's two biggest economies, both saw growth of 0.3 percent in the second quarter, ending their worst recession in decades and surprising analysts.
SHANGHAI _ Chinese shares retreated on jitters about the strength of China's economic recovery and corporate earnings, ending the week down 6.6 percent. The benchmark Shanghai Composite Index lost 93.59 points, or 3 percent, to close at 3,046.97. The Shenzhen Composite Index for China's smaller second exchange shed 3.6 percent to 1022.92. Investors turned cautious in expectation of lower bank lending for the remainder of the year after a first-half surge. The government reported this week that retail sales, trade and investment rose in July but not as fast as investors hoped.