Global stock markets were mostly lower and the dollar fell Friday as traders banked recent profits before a keenly-awaited speech on the economy by US Federal Reserve chairman Ben Bernanke.
Traders were also awaiting a gross domestic product reading from the United States and tracking the unrest in Libya, after an expected announcement that Japan's prime minister had resigned.
In midday European deals, Frankfurt's DAX 30 shed 1.82 per cent, London's FTSE 100 lost 0.46 per cent and the Paris CAC 40 dropped 0.71 per cent after Asian markets closed mostly down and Wall Street slumped overnight.
Frankfurt suffered heavy losses a day after sliding on rumours, later denied, that Germany could lose its triple-A credit rating while London showed little reaction to confirmation Friday that Britain's economy slowed sharply in the second quarter.
'It is shaping up to be a very interesting and potentially volatile afternoon, with US GDP data ... followed by Bernanke's speech at Jackson Hole,' said Joshua Raymond, chief market strategist at London-based trading group City Index.
'Both factors are likely to play a significant role in how European equities close out the week,' he added.
In foreign exchange deals, the euro rose to $1.4440 from $1.4379 in New York late Thursday. The dollar also fell to 76.99 yen from 77.45 yen Thursday.
Bernanke was to address a gathering of central bankers in Jackson Hole, Wyoming beginning at 1400 GMT.
With its easy-money stimulus policy having run its course, many are worried the Fed does not have enough left in the way of monetary tools to give the faltering US economy another boost.
'There's a widespread belief that, with further intervention seemingly required to keep the US economy moving along, some solid indications will be included' in Bernanke's address, said Cameron Peacock, an analyst at trading group IG Markets.
'Perhaps most critical is the fact that the market appears to have priced in such news already so any failure to deliver risks initiating another bout of (stocks) selling in the short term,' Peacock said.
US stocks closed lower on Thursday, with the Dow Jones Industrial Average dropping 1.51 per cent.
However global markets have risen over the week after recent slumps caused by fears of a fresh recession and due to fallout from the European debt crisis.
Tokyo closed up 0.29 per cent on Friday after Japanese prime minister Naoto Kan made a long-expected announcement that he would resign as president of the Democratic Party of Japan, ending his tenure as Japanese leader.
A new prime minister, the nation's sixth in five years, is expected to be elected next week.
Elsewhere in Asia, Hong Kong fell 0.86 per cent and Sydney dipped 0.30 per cent.
'This may be the calm before the storm,' Hisatsune Kobayashi, general manager of global investment strategy at SMBC Nikko Securities in Japan, told Dow Jones Newswires.
'Although most market players don't expect ... Bernanke to introduce aggressive monetary easing measures ... investors will nevertheless be disappointed if he does nothing at all.'
Source : New Age
