Markets steady in run-up to EU summit

LONDON - Markets were largely steady Thursday, after solid gains this week, on signs that China's economy is not slowing as quickly as feared, the U.S. is recovering and Spain will soon request a bailout.

With European leaders gathering for their latest summit meeting in Brussels, investors have moved to the sidelines. Though expectations that the 27-nation EU will agree terms of a banking union have diminished over recent days, investors are keen to hear updates on the economic fate of Spain, as well as Greece, which appears to be near to securing its next batch of bailout cash.

"There seems to be some cheer coming through from the expectation that the EU summit may deliver some meaningful direction on continuing to resolve the euro crisis so against this backdrop perhaps the upbeat mood is to be expected," said Mike McCudden, head of derivatives at Interactive Investor.

In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 5,922, while Germany's DAX rose 0.4 to 7,424. The CAC-40 in France was flat at 3,527.

Wall Street was also poised for a flat opening, with both the Dow futures and the broader S&P 500 futures broadly unchanged.

How U.S. stocks perform could hinge on the next round of corporate earnings statements from the likes of Verizon. Technology giants Google and Microsoft are also due to report after the close.

"Earnings season has so far provided more 'beats' than we would have been expecting, though with few knockout numbers," said Will Hedden, sales trader at IG.

There was a similarly subdued feel elsewhere in the markets, with the euro broadly unchanged over the day at $1.3110 and the price of a barrel of benchmark New York crude down a single cent at $92.11 a barrel.

Earlier, China was in focus after figures showed the world's No. 2 economy grew by 7.4 percent in the third quarter from the same period the year before. Though lower than the previous quarter's 7.6 growth, the decline was much gentler than previous quarters. Upbeat retail sales figures also helped ease concerns over the slowdown.

"With many still pinning hopes of a global economic recovery being driven by China, this news is certainly welcome," said Fawad Razaqzada, markets strategist at GFT Markets.

In mainland China, the Shanghai Composite Index gained 1.2 percent to 2,131.69, the highest close in more than a month. The Shenzhen Composite Index gained 1.7 percent to 878.64.

Elsewhere in Asia, Japan's Nikkei 225 index rose sharply, by 2 percent to close at 8,982.86 and Hong Kong's Hang Seng added 0.5 percent to 21,518.71.