European stocks rise on eurozone firewall deal

European stocks advanced on Friday after news of a eurozone deal to boost the region's firewall against future financial crises, but Spanish bond yields held at high levels. London's FTSE 100 index of top shares rose 0.62 percent to 5,777.76 points in midday trade, Frankfurt's DAX 30 won 0.96 percent to 6,941.50 points and in Paris the CAC 40 advanced 1.22 percent to 3,423.64. Madrid's Ibex 35 gained 0.96 percent to 7,987.90 points and Milan's FTSE Mib index climbed 0.74 percent to 16,023.86. The European single currency meanwhile edged upwards to $1.3351, from $1.3301 late in New York on Thursday. At the same time, Spanish government 10-year bond yields remain stubbornly high as Madrid attempts to push through a new austerity budget ahead of the weekend, after the nation was gripped by Thursday's general strike. Eurozone finance ministers meeting in Copenhagen have agreed to boost their firewall against the debt crisis to about 800 billion euros ($1.07 trillion), Austrian Finance Minister Maria Fekter told reporters on Friday. Fekter said the final figure agreed on was "in total, over 800 billion" and that "this 800 billion is a trillion US dollars and that is roughly the defined firewall." She added that the funds comprised 500 billion euros from the permanent ESM bailout fund that comes into effect in July, plus 200 billion in loans already pledged, plus another 100 billion in bilateral loans and EU funds. The firewall total matches a pledge made by German finance minister Wolfgang Schaeuble. "Equities are holding up well despite the number coming in short of the 940-billion-euro package that many had hoped for," said analyst David Morrison at trading group GFT. "This is probably because there was a danger that Germany would lead the push from stronger EU members for a smaller bailout fund." Other analysts cast serious doubt on whether the firewall would be big enough to stop the eurozone sovereign debt crisis once and for all. "This so-called firewall is about as much use as a chocolate fireguard," said Michael Hewson at CMC Markets. "Germany has already said that any new firewall should not exceed 800 billion euros. This is by no means enough if you want to send a message that you are serious about protecting Spain and Italy. "The bottom line, is unless EU leaders mobilise a firewall in excess of 1.0 trillion euros, doubts will remain about their ability to prevent a contagion." Highlighting the main reason to bolster the firewall -- fears that the sovereign debt crisis that started in Greece could spread to larger economies such as Italy and Spain -- were fresh concerns about Spanish fiscal strains. Spain's borrowing costs have risen in recent weeks after Madrid admitted it had missed its 2011 deficit target of 6.0 percent of gross domestic product, reporting 8.5 percent instead. "The problem is that troubled countries such as Ireland, Portugal, Spain and possibly Italy, just cannot grow fast enough to address their outstanding national debt, which continues to mount up," said analyst Morrison. "In particular, the situation in Spain is looking increasingly precarious." Asian markets mostly fell on Friday on growing concerns over the global economy after an unimpressive set of US data, while weak Japanese figures and a stronger yen weighed on Tokyo. Hong Kong ended down 0.26 percent, Tokyo lost 0.31 percent, while Shanghai closed 0.47 percent higher Wall Street again provided an unenthusiastic lead. New claims for US unemployment benefit hit a four-year low but the rate of decline was slower than anticipated, according to analysts. The Dow closed 0.15 percent higher on Thursday, the S&P 500 lost 0.16 percent and the tech-heavy Nasdaq gave up 0.31 percent.