* Emerging markets underperform
* Weak growth reading hits South Korea's currency
* European valuations not excessive -fund manager
* Greece vote keeps bailout deal hopes on track
(Adds U.S. futures)
By Lionel Laurent
LONDON, July 23 (Reuters) - Financial markets were
relatively muted on Thursday, with a positive raft of corporate
results in Europe and progress in Greece offset by mixed
economic data and worries about growth in emerging markets.
European equities had erased morning gains and were trading
0.3 percent lower by 1200 GMT, echoing a mixed performance on
Asian markets after South Korea's economy recorded its weakest
expansion in six years in the second quarter. Energy and mining
stocks were the worst performers as commodities prices steadied.
Sterling was hit by British retail sales data showing an
unexpected dip last month as consumers bought fewer household
goods, pushing the annual rate of spending growth for the
quarter to its lowest in more than two years. ID:nL5N10328L
Emerging markets took a hit, with currencies extending falls
against the dollar and equities down 0.4 percent. The Korean won
hit new three-year lows after its weak economic reading, while
the Indonesian rupiah and the Thai baht touched new 17-year and
six-year lows respectively IDR= THB= .
Worries over demand for commodities from markets such as
China and the impact of an expected U.S. interest rate hike on
emerging market capital flows have taken the shine off global
markets even as fears over Greece recede.
"European stock markets are getting some pressure from the
commodities side," said Christian Stocker, equity strategist at
UniCredit in Munich.
"Increasing concerns about China and overcapacities in the
mining sector could continue to put pressure on mining stocks."
U.S. equity futures SPc1 were broadly flat ahead of
another busy day for corporate earnings, with General Motors
GM.N and McDonald's MCD.N reporting earnings. McDonald's
reported second-quarter earnings per share of $1.26, better than
expectations for $1.23, though global comparable sales fell.
Europe also saw a busy earnings day, with Swiss bank Credit
Suisse CSGN.VX soaring more than 7 percent on
better-than-expected results. On the flipside, Aberdeen Asset
Management ADN.L sank more than 7 percent after suffering a
ninth consecutive quarter of fund outflows.
Paris-based fund manager Vincent Guenzi, at Cholet Dupont,
said European valuations were "not excessive" but that it was
too early to tell whether this earnings season would see
analysts upgrade their forecasts.
There was also more reason for optimism on Greece, where
Prime Minister Alexis Tsipras contained a rebellion in his
left-wing Syriza party to win parliamentary approval for reforms
required to start talks on a financial rescue deal.
ID:nL5N1020XQ
Peripheral bond yields fell and the German bund held steady,
while the euro rose to hit $1.10 for the first time in more than
a week. The dollar against a basket of six major currencies
.DXY fell.
Commodities markets were steady, with U.S. oil CLc1 up 22
cents to $49.42 per barrel and Brent crude LCOc1 broadly flat
at $56.20. Rising U.S. stockpiles and a strong dollar have been
a drag on oil prices.
In metals, gold edged up from a five-year low, though
bearish investors were still hovering. London copper prices
meanwhile rose as short-sellers rushed to cover their positions
in a volatile session after a bearish call from Goldman Sachs
had sent the metal to its lowest in a fortnight.