European Markets Finished Mostly Lower As Greek Concerns Weigh

(RTTNews) - The majority of the European markets ended Friday's session in negative territory. Investor concerns over Greece continued to impact the markets. However, it is believed that a reform deal should be reached in the coming 10 days to release the next tranche of bailout fund.

At the end of talks in Riga, Latvia on Thursday, German Chancellor Angela Merkel said much more work needs to be done to provide bailout funds for Greece.

Investors were also cautious ahead of a speech from Federal Reserve Chair Janet Yellen later today. Yellen is expected to speak on the economic outlook.

European Central Bank President Mario Draghi reiterated on Friday that euro area economic conditions have improved, indicating a cyclical recovery, and urged the region's governments to make progress on structural reform that is essential to sustain the momentum.

"The economic outlook for the euro area is brighter today than it has been for seven long years. Monetary policy is working its way through the economy," Draghi said in a speech at an ECB central banking conference in Sintra, Portugal.

"Growth is picking up. And inflation expectations have recovered from their trough. This is by no means the end of our challenges, and a cyclical recovery alone does not solve all of Europe's problems." Bank of England Deputy Governor Minouche Shafik said productivity growth is likely to resume and factors pulling inflation down could be temporary.

"I think it is reasonable to expect that resumption in productivity growth to come over the next year or so as the continued narrowing of slack in the labor market raises the incentive to increase output by increasing output per worker," she said at the Association of Corporate Treasurers Annual Conference on Friday. But the degree of uncertainty around the timing is high.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 0.25 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, finished flat.

The DAX of Germany declined by 0.42 percent and the CAC 40 of France fell by 0.07 percent. The FTSE of the U.K. gained 0.26 percent, but the SMI of Switzerland finished lower by 0.13 percent.

In Frankfurt, Deutsche Bank dropped by 2.73 percent. The company announced a board reshuffle, giving the responsibility of Strategy to co-CEO Anshu Jain. Commerzbank also finished down by 0.64 percent.

In Paris, conglomerate Bouygues dropped by 2.08 percent and department stores operator Kering fell by 2.04 percent.

Telecom firm Orange also finished down by 1.55 percent.

In London, Vodafone surged by 4.64 percent amid M&A speculation.

Travis Perkins advanced by 1.47 percent, after Jefferies upgraded the stock to "Buy" from "Underperform."

Severn Trent fell by 0.37 percent, after the utility reported annual results.

Richemont fell by 1.04 percent in Zurich. The luxury group reported a sharp decline in fiscal 2015 profit, but also hiked its dividend.

Swiss Re gained 0.83 percent, after Citigroup upgraded its rating on the stock to "Buy" from "Neutral."

German business confidence weakened marginally from a 10-month high in May and the economy grew at a slower pace in the first quarter, as initially estimated, revealed two separate reports released Friday.

The business confidence index fell less-than-expected to 108.5 in May from 108.6 in April, according to a survey by Munich-based Ifo Institute. This was the first fall in seven months but the index came in above the economists' estimate of 108.3.

Germany's economic growth eased as estimated in the first quarter largely due to the weakness in foreign trade, final data from Destatis showed Friday. Gross domestic product grew 0.3 percent sequentially in the first quarter, slower than the 0.7 percent expansion seen in the fourth quarter.

The total value of new orders received by the German construction industry declined in March, figures from Destatis showed Friday. Orders in the construction sector fell a seasonally and working-day-adjusted 2.2 percent month-over-month in March.

French consumer confidence improved unexpectedly in May to the strongest level since August 2011, survey data from the statistical office Insee showed Friday. The manufacturing confidence index rose slightly to 103 in May from 102 in the previous month, which was revised from a reading of 101. Economists had expected the index to remain stable at 101.

Italy's retail sales dropped unexpectedly in March, after staying flat in the previous month, figures from the statistical office Istat showed Friday. Retail sales fell 0.2 percent year-over-year in March, defying economists' expectations for a 0.4 percent climb.

The U.K. budget deficit narrowed in April from last year, data published by the Office for National Statistics showed Friday. Public sector net borrowing excluding banks declined by GBP 2.5 billion to GBP 6.8 billion in April.

British households perceive that the value of their home increased in May, a survey from Knight Frank and Markit Economics showed Friday. The house price sentiment index, or HPSI, fell slightly to 58.0 in May from 58.2 in the previous month. However, a reading above 50 indicates a rise in house prices. This marked the twenty-sixth successive month of the index remaining above 50.

Consumer prices in the U.S. rose in line with economist estimates in the month of April, according to a report released by the Labor Department on Friday, although the report also showed a bigger than expected increase in core prices.

The Labor Department said its consumer price index inched up by 0.1 percent in April after rising by 0.2 percent in each of the two previous months. The modest increase matched economist estimates.