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European stocks mostly rise as eurozone meets

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(Globalpost/GlobalPost)

European stock markets mostly rose and the euro advanced against the dollar on Monday as eurozone finance ministers met in Brussels after last week's historic EU budget deal.

Supermarkets were in focus as a Europe-wide food fraud scandal over horsemeat sold as beef deepened over the weekend as Romania announced an inquiry into the origin of the meat and suspicions of criminal activity mounted.

London's FTSE 100 index of top companies rose 0.27 percent to 6,280.91 points in afternoon trading. Frankfurt's DAX inched down 0.05 percent to 7,648.52 points and in Paris the CAC 40 won 0.27 percent to 3,659.49 points.

European stock markets had risen on Friday as investors took heart from upbeat Chinese and US economic data and EU leaders agreed on a seven-year budget for the 27-member union.

"Stocks are slightly higher today as the Eurogroup meeting gets under way and eurozone finance ministers discuss the possibility of a bailout for Cyprus," said IG trading group analyst David Madden.

In foreign exchange trading on Monday, the European single currency climbed to $1.3387 from $1.3361 on Friday.

Gold prices fell to $1,663.50 an ounce from $1,668.25 Friday on the London Bullion Market.

European Union leaders agreed on Friday the first ever cut in the bloc's budget after all-night talks driven by sharp differences over priorities for the next seven years.

"Deal done!" summit chair and EU President Herman Van Rompuy said on Twitter after more than 24 hours of tough talks between the bloc's 27 heads of state and government.

Dutch Finance Minister Jeroen Dijsselbloem, the new head of Eurogroup, holds his first meeting on Monday just as hard-won measures to stabilise the bloc pose a different problem -- a strong euro dampening the economy.

The debt crisis Dijsselbloem inherits has eased greatly since the European Central Bank vowed last year to intervene in the markets to tame borrowing costs and EU leaders agreed tough steps to bolster the euro's defences.

But after months when it seemed the single currency's future was in doubt, the euro has strengthened, sparking fears it could make eurozone exports less competitive and so undercut badly needed growth.

France especially has voiced its concerns as Japan, a major EU trading partner, forces down the yen to make its exports cheaper.

Dijsselbloem said the 17-nation eurozone would likely examine the issue of the strong euro in a general way.

"It might be a subject at the Eurogroup meeting, quite right," he said on arrival for the talks. "We will discuss as usual the economic state in the eurozone and the issue might rise there."

Asked if the eurozone needed an exchange rate policy, as suggested by France, he said: "I certainly won't comment on that now; we will see whether it comes up."

Away from the euro, Britain's food minister on Monday suggested that an "extensive" criminal conspiracy could be behind the horsemeat scandal in Europe.

Owen Paterson said he believed warnings had been sent out to 16 different countries which might be affected by the scandal.

Eating horse is considered taboo in Britain and tests have found some frozen ready meals produced in mainland Europe and labelled as processed beef actually contained up to 100 percent horsemeat.

Britain's biggest retailer, supermarket giant Tesco, has removed from its stores products found to have contained horsemeat. Tesco's share price was up 1.67 percent to 368.65 pence in London trading.

US shares pulled back in opening trade Monday after reaching five-year peaks in light trade on Friday.

Five minutes into trade the Dow Jones Industrial Average was down 0.22 percent to 13,961.91 points.

The S&P 500 index fell 0.13 percent to 1,515.92 points, while the tech-rich Nasdaq Composite Index lost 0.09 percent at 3,191.00 points.

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http://www.globalpost.com/dispatch/news/afp/130211/european-stocks-mostly-rise-eurozone-meets