AFP/London

Europe’s main stock markets mostly fell yesterday as investors fretted over Italy’s post-election deadlock, poor economic data, looming US budget cutbacks and a raft of company results.
London’s FTSE 100 index of leading companies bucking the trend to add 0.28% to close at 6,378.6 points on the back of encouraging US data including a third-straight month of increasing manufacturing.
Frankfurt’s Dax 30 shed 0.43% to 7,708.16 points, and in Paris the Cac 40 lost 0.62% to 3,699.91 points.
Milan’s FTSE Mib index lost 1.54% to 15,675 points as rising Italian unemployment numbers compounded worries about ongoing political uncertainty following inconclusive elections earlier this week.
Madrid’s Ibex 35 retreated 0.52% to 8,187.1 points after gloomy news that Spain’s manufacturing sector continued to shrink in February.
The euro fell to $1.2984 from $1.3062 late in New York on Thursday. Gold prices declined to $1,582.25 an ounce on the London Bullion Market from $1,588.50 on Thursday.
The looming $85bn in indiscriminate, across-the-board US budget cuts known as the sequester, which were due to kick in later yesterday unless politicians agree to alternatives cast a shadow over most of the European trading session.
Official data also painted a far from encouraging picture of the European economy, with unemployment running at record and “unacceptable” highs in the eurozone while inflation fell sharply, highlighting the weakness of consumer demand.
However “equities have been dragged higher in afternoon trade on the back of bullish US macro data, as well as optimism over progress in sequester negotiations,” said CMC Markets trader Toby Morris.
US manufacturing activity expanded in February for the third month in a row, hitting the highest level since 2011, according to the ISM survey of purchasing managers released yesterday.
Automakers also reported modest gains in February US sales, and consumer sentiment improved.
US stocks recouped early losses to show modest gains in midday trading.
The Dow Jones Industrial Average added 0.09% to 14,067.12 points, the broad-based S&P 500 climbed 0.13% to 1,516.58, and the tech-rich Nasdaq Composite edged up 0.03% to 3,161.27.
Equities had risen in Europe on Thursday as dealers brushed aside lower-than-expected US economic growth to focus on upbeat jobs data in the world’s biggest economy, dealers said.
However, investor sentiment was hit yesterday also by weak data in China — and in the 17-nation eurozone where unemployment rose to a record 11.9% in January from 11.8% in December, with nearly 19mn people out of work.