Market update: Fears for Euro area instability weigh on markets

On Friday, US stocks advanced following unexpectedly better US trade deficit data. According to the US Department of Commerce, the December trade deficit fell to an almost three-year low of $38.5 bn, suggesting the recent quarterly GDP contraction may have been overstated. Wall Street also rose on news of the 3% reduction in the EU budget limit for 2014-2020 (to €908bn). The S&P 500 closed up 0.6% and the Dow Jones finished 0.4% higher. In stock news, shares in LinkedIn surged more than 15% following estimate beating Q4 profits while revenue almost doubled over the period.

In early trading Monday morning the FTSE Eurofirst 300 is down 0.2%, but the FTSE 100 is up 0.3%. Fear of instability in the eurozone is driving the markets lower; the chief concerns being the Spanish government corruption scandal involving prime minister Mariano Rajoy and the increasingly tight Italian election later in the month. Meanwhile, in Brussels today euro area ministers will discuss bailout packages for further aid for Cyprus and Greece. Danish pharmaceutical Novo Nordisk is falling this morning as US approval for its Tresiba insulin drug is delayed.

Stock markets are closed in China, Hong Kong, Singapore and South Korea for the Chinese New Year holidays.