European markets trade mostly flat

May 31, 2010 at 12:00a.m.

Associated Press

PARIS

European stock markets traded mostly flat Monday as investors shrugged off more sobering news about shaky government finances ahead of a busy schedule of U.S. economic data later in the week.

The CAC 40 index of leading French shares was down almost 3 points at 3,512.16 while Germany’s DAX rose 38.47 points or 0.7 percent to 5,984.65. Spain’s IBEX index fell 0.7 percent to 9,363.2.

Oil, meanwhile, rose above $74 a barrel, and the dollar gained against the yen and weakened against the euro.

Markets in the U.S. and Britain were closed for public holidays.

In an otherwise quiet session due to the U.K. bank holiday, investors remained focused on Europe’s debt crisis. The French parliament was scheduled to go over a revised budget bill ahead of its expected approval of France’s share of the trillion-dollar bailout for struggling member states.

German markets shrugged off the surprise resignation of President Horst Koehler. Koehler quit Monday from the largely ceremonial post after being criticized for remarks in which he appeared to link military deployments abroad with the country’s economic interests.

Eurozone inflation increased in May but remained well below the 2 percent medium-term target set by the European Central Bank, figures released by Europe’s statistics office showed Monday.

Markets had no direction from U.S. markets, which were closed for Memorial Day. But a heavy schedule of economic data due later in the week including the May jobs report is expected to drive trading as investors get a clearer picture of the economic recovery.

Comments by European Central Bank chief Jean-Claude Trichet in support of closer control of financial and economic policy across the 16-nation European currency zone were not enough to stir a reaction on markets, where volumes were thin.