A look at economic developments around the globe

AP News
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Posted: May 05, 2011 1:33 PM

A look at economic developments and activity in major stock markets around the world Thursday:

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FRANKFURT, Germany _ European Central Bank head Jean-Claude Trichet offered struggling Greece, Portugal and Ireland a little bit of relief by signaling that the bank would not raise interest rates as fast as the markets had been expecting.

The ECB left its key rate unchanged at 1.25 percent at a meeting in Helsinki, Finland. The euro suffered one of its worst days this year after Trichet signaled that another rate hike next month was not likely.

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LISBON, Portugal _ Portugal will get IMF loans at rates similar to those granted to Greece and Ireland, but Lisbon is still waiting for its fellow European countries to decide how much they'll charge for their slice of a $115 billion bailout.

The ailing country is struggling to get free of its massive debts. Portuguese officials are keen to avoid bailout terms that might thwart economic growth needed to create jobs.

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LONDON _ The euro dropped sharply after the European Central Bank's president signaled interest rates would not rise again next month, as traders were expecting. More weak U.S. economic data fueled worries that the world's largest economy is slowing down, hitting stocks.

In Europe, the FTSE 100 index of leading British shares closed down 1.1 percent while France's CAC-40 dropped 1 percent. Germany's DAX recovered from earlier selling and ended up less than 0.1 percent.

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TOKYO _ The dollar fell below 80 Japanese yen for the first time since the Group of Seven central banks intervened to weaken the yen in mid-March. Investors speculated that Japan may intervene again to stem the export-sapping appreciation of the yen.

The yen has been buoyant of late as it garners support at times of risk aversion in the markets due to its perceived status as a safe haven for investors.

In equities trading, China's benchmark Shanghai Composite Index gained 0.2 percent after its biggest loss in more than 2 months the day before. Hong Kong's Hang Seng index dropped 0.2 percent. Stock markets in South Korea and Japan were closed for holidays.

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LONDON _ The Bank of England kept its key interest rate at a record low of 0.5 percent amid sluggish economic growth and a surprise drop in the inflation rate.

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BEIJING _ Two of China's biggest technology companies have launched a court battle in Europe over mobile phone patents in a rare public clash between firms Beijing is promoting as national champions. The fight between Huawei Technologies Ltd. and ZTE Corp. highlights the challenge for communist leaders who need to manage Chinese corporate ambitions as they try to create global competitors in telecoms, energy and other fields. It is the first case of its kind between major Chinese companies, which usually settle disputes in private.

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SEOUL, South Korea _ South Korea's ruling party rammed the country's free trade agreement with the European Union through parliament amid an opposition boycott in a result that shifts focus to a still-unratified deal with the United States.

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MADRID _ Spain had to paid slightly higher interest rates to raise $5 billion in an auction of 5-year bonds after Portugal's bailout.

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JOHANNESBURG _ Africa's economies are growing, but a panel chaired by the first U.N. head from the region said there is still too much dependence on the export of raw materials and not enough trade happening between countries.

Kofi Annan's Africa Progress Panel called Africa's growth low quality.

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CAIRO _ Egypt's net international reserves fell $2 billion in April, the fourth consecutive month of declines. Egypt's economy has reeled from the aftereffects of the mass uprisings that toppled former president Hosni Mubarak.

Net international reserves fell to $28 billion in April, the lowest level in more than three years, from $30.1 billion the previous month. The country's foreign reserves have dropped by $8 billion since December, month before protests began that thrust Egypt down a path of political uncertainty and economic doldrums.

Analysts have predicted foreign reserves will fall as officials try to offset the steep drop in tourism revenue and foreign direct investment, two mainstays of the economy.

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WARSAW, Poland _ Poland's government accepted a draft budget for 2012 that aims to curb the deficit to 2.9 percent of GDP.

The deficit is supposed to be under 3 percent in countries readying to adopt the euro, such as Poland.

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AMSTERDAM _ ING Groep NV reported first quarter earnings grew 12 percent on fat banking margins and improvements at its insurance business. The financial services company said it intends to pay back $4.5 billion in bailout money it owes the Dutch state.

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MADRID _ Spanish bank BBVA said its first-quarter profit dropped 7.3 percent as a poor business climate in its home market offset improvement in Mexico.

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LONDON _ Lloyds Banking Group PLC reported a $4 billion loss for the first three months of the year after booking a large charge for potential costs of compensating buyers of payment protection plans.