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Market Update

European Markets Wander; U.S. Debt Talks in Focus

European stocks were trading mixed Wednesday as investors sought direction ahead of a closely-watched vote on the U.S. debt ceiling later in the day.

The FTSE 100 was up 0.2% at 8:48 a.m. London time. The CAC 40 Paris edged down 0.2% while the DAX Frankfurt was flat.

Markets had opened on a positive note this morning following upbeat investor confidence data from Germany and some positive corporate earnings in the U.S.

However, the gains soon fizzled out as investors turned their focus towards U.S. budget negotiation talks set to begin later today.

Republican leaders in the House of Representatives said they hoped to pass on Wednesday an extension of nearly four months of the U.S. debt ceiling, which would allow the government to borrow funds to meet its obligations during the extended period.

Stocks on the move

Amid debt woes in the world's largest economy, investors steered away from financial stocks.

French lender Societe Generale dropped 1.4% while Credit Agricole SA erased 1.3%.

In Germany, Commerzbank AG moved 1.5% lower  while Deutsche Bank AG gave up 0.5%. Reports released earlier in the day said that Deutsche Bank would shell out around $1.7 million to settle allegations of power market manipulation in California.

Some London-listed financials, however, managed to eke out modest gains. Barclays Plc. edged up 0.5% after the bank said it would shut down its Brazilian research unit and also slash jobs as part of its global restructuring plans.

Standard Chartered Bank was up 1.4% but Lloyds Banking Group eased 0.8%. 

Meanwhile, Unilever Plc. gained 2.5% after its sales came in higher than expected.