Europe markets muted as Ukraine turmoil grows

Unidentified armed men patrol outside of Simferopol airport, on Feb. 28, 2014.  VIKTOR DRACHEV/AFP/Getty Images

MUMBAI, India - Asian stock markets were mostly higher Friday, boosted by Wall Street's record high, but trading was cautious in Europe as political turmoil in Ukraine appeared to intensify.

France's CAC 40 was down 0.3 percent at 4,384.05 and Britain's FTSE 100 shed 0.1 percent to 6,804.17. Germany's DAX was little changed at 9,591.38.

Futures pointed to losses on Wall Street, with Dow futures down 0.1 percent and S&P 500 futures off 0.2 percent. The U.S. releases a revised estimate for fourth quarter economic growth later Friday that analysts expect will show the economy growing at a slower rate than first thought.

Investors are keeping a nervous eye on the crisis in Ukraine following accusations by the country's new interior minister, Arsen Avakov, that Russian military were blocking a Ukrainian military airport in the Black Sea port of Sevastopol in Crimea.

Ukraine's Parliament, meanwhile, adopted a resolution calling for a U.N. Security Council meeting and demanding that Russia halt steps which it says are aimed against Ukraine's sovereignty and territorial integrity.

IG market analyst Stan Sahmu said that while traders for now are focused on economic indicators, "the Ukraine situation seems to be escalating in the background and could haunt markets in coming weeks."

Over the past couple of weeks, investors had monitored developments in Ukraine with a degree of nonchalance. Now they are worrying that Russia may be drawn in after Moscow granted shelter to Ukraine's fugitive president, Viktor Yanukovych, after recent deadly protests in Kiev swept in a new government.

In Asia, China's tightly controlled currency, the yuan, was allowed to fall to 6.1450 to the dollar. That followed a steady decline over the past two weeks after the yuan hit record highs, coming close early this year to breaking through six to the dollar.

Analysts believe China's central bank is preparing to widen the narrow band within which the yuan is allowed to fluctuate each day. That would be an effort to discourage speculators by allowing more market flexibility and to cool inflows of money attracted by higher Chinese interest rates.

The central bank's move "largely reflects its determination to tame appreciation expectations and counter hot money inflows," said DBS Group in a report Friday. "It does not suggest a fundamental shift of policy toward weakening the currency."

China's Shanghai Composite Index rose 0.4 percent to 2,056.30 and South Korea's Kospi gained 0.1 percent to 1,979.99. The Hang Seng in Hong Kong was little changed while India's Sensex gained 0.4 percent to 21,074.58 ahead of GDP growth numbers due later in the day.

Japan's Nikkei 225, the regional heavyweight, was an exception, dropping 0.6 percent to 14,841.07 after a raft of economic data released Friday suggested the economy needs still more help in weathering a 3 percent sales tax increase in April.

The mostly upbeat trading in Asia came after the S&P 500 reached an all-time high Thursday, powered by strong earnings from a number of U.S. companies. The index rose 9.13 points, or 0.5 percent, to 1,854.29. Its previous record high close was 1,848.38, set on Jan. 15.

The price of crude oil dropped, with benchmark U.S. crude for April delivery down 38 cents to $102.02 in electronic trading on the New York Mercantile Exchange.

In currency dealings, the euro edged up to $1.3796 from $1.3707 on Thursday. The dollar fell to 101.93 from 102.05 yen.

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