European stocks close mostly firmer

European stocks closed mostly firmer on Monday, posting very modest gains in quiet trade as the US markets were shut for the Independence Day public holiday. Dealers said there was little news other than a Standard and Poor's warning that current debt relief efforts on Greece are tantamount to a default -- an outcome the eurozone is trying at all costs to avoid. They said the impact might have been greater if Wall Street was open, so much depends on what happens Tuesday, but the S&P lead hit the banks amid fears that the whole Greek debt crisis could be re-opened after recent apparent progress. Eurozone ministers cleared the next tranche of Greek debt aid at the weekend and are due to meet again July 11 to discuss a second overall bailout package, to follow the May 2010 accord with the EU and International Monetary Fund. In London, the benchmark FTSE 100 index of top shares closed up 0.46 percent to 6,017.54 points. In Frankfurt, the DAX rose 0.32 percent at 7,442.96 points but in Paris the CAC 40 slipped 0.11 percent to 4,003.11 points. Most other European markets were higher but Milan lost 0.20 percent and Madrid 0.23 percent, reflecting nerves there over Italian and Spanish debt levels in light of the S&P statement on Greece. Dealers said the key plank in latest efforts to get Athens off the debt hook, by involving private sector creditors in a loan rollover, looked in trouble after the S&P warning and officials might have to think again. "Obviously the politicians have yet to agree with the rating agencies how a default rating can be avoided if the private sector is involved," Commerzbank chief economist Joerg Kraemer said. "It is our view that each of the two financing options described in the (French) proposal would likely amount to a default under our criteria," S&P said, referring to a French plan for banks to roll over their Greek exposure. S&P said that in effect, the plan would see creditors disadvantaged and therefore it had to be termed a default -- the key word the EU wants to avoid so as to keep the debt crisis under lock and key for as long as possible. Analyst David Morrison at trading group GFT noted that the banks fared worst on the S&P lead and additionally, after strong gains last week made on hopes the Greek crisis was being resolved, investors had little incentive to buy more. Among the banks in London, Barclays lost 1.07 percent, Lloyds dropped 1.84 percent and RBS shed 1.46 percent, while in Paris BNP Paribas fell 1.08 percent and Societe Generale lost 1.34 percent. In Asian trade earlier Monday, markets posted strong gains as they picked up on Wall Street's advance Friday after better-than-expected US manufacturing data. Tokyo rose 0.98 percent, Hong Kong added 1.66 percent, Shanghai put on 1.94 percent and Sydney was up 0.42 percent.