European stocks edge higher awaiting Cyprus outcome

European stock markets were mixed on Friday as traders hunted for bargains at the end of a turbulent week for equities owing to the Cyprus bailout and banking crisis that was awaiting resolution. London's FTSE 100 index of leading companies grew 0.22 percent to stand at 6,402.86 points around midday in the British capital, despite the luxury retail sector being weighed down by a new profits warning from Mulberry. In Frankfurt, the DAX 30 fell by 0.23 percent at 7,914.53 points after data revealed that German business confidence fell for the first time in five months in March. The Paris CAC 40 was off by 0.15 at 3,769.04 points, while in Madrid the IBEX 35 shares index edged up 0.02 percent in value to 8,352.70. "With no US data out this afternoon all eyes remain fixed on Nicosia," said IG trading group analyst Chris Beauchamp. "This time last week the market was blissfully unaware of the finer points of the Cypriot banking system or of the island's politics. Now, most investors just wish that a deal could be done," he added. Cyprus was Friday locked in "hard negotiations" with a troika of lenders to save the eurozone member's banking system and economy in general from ruin, government spokesman Christos Stylianides said. The European Union has given Nicosia until Monday to raise 5.8 billion euros ($7.47 billion) to unlock loans worth 10 billion euros or face being choked from European Central Bank emergency funding in a move that would bankrupt the island. EU sources have said the bloc is ready to eject Cyprus from the eurozone to prevent contagion of other debt-hit members such as Greece, Spain and Italy. Despite the dark clouds, the euro climbed to $1.2936 from $1.2896 in New York late on Thursday, with traders putting the single currency's support down to hopes of a deal being reached over Cyprus. "The euro's resilience is surprising, but it could be a sign that the market trusts the ECB's promise to do what it takes to save the eurozone," said Kathleen Brooks, research director at Forex.com trading group. "While not being able to pull Cyprus from the abyss, the (European Central) Bank may well be able to ring fence Spain and Portugal. Spanish and Italian bond yields have continued to fall today. "Spain, who also has its own banking problems -- has seen its 10-year yield fall below 5%, close to its lowest levels since 2010," she added in a client note. Elsewhere Friday, gold prices dipped to $1,612.28 an ounce from $1,613.75 Thursday on the London Bullion Market. On the corporate front, investors' focus was on the luxury goods sector after British handbag maker Mulberry issued on Friday its second profits warning in six months, sending its shares crashing. "Mulberry Group... announces today that due to weaker than anticipated trading post-Christmas, revenues and profit before tax for the year ending 31 March 2013 are expected to be below market expectations," it said in a statement. In reaction, the company's share price plunged 15.89 percent to 1,038.8 pence on the London stock market. The news also sent rival luxury group Burberry's share price sliding 3.75 percent to 1,335 pence. Mulberry had in October already warned that Asia's economic slowdown, lower sales and higher costs would heavily weigh on its annual profits.