European stocks drop on downbeat US data

Moleskine notebooks are arranged in an undated handout image released yesterday by the company’s press office. Shares in famous Italian notebook-maker Moleskine made a lacklustre debut in Milan yesterday.

AFP/London

Leading European stock markets fell sharply yesterday as dealers locked in profits from a technical spike a day earlier and investors took note of disappointing US economic data.

European equities had rallied in thin trading on Tuesday, with Frankfurt and Paris closing up almost 2.0% each, after dealers returned to their desks from the Easter holiday weekend to digest developments over the Cyprus debt crisis.

But much of that was given up yesterday, when London’s FTSE 100 index of leading companies closed with a loss of 1.08% at 6,420.28 points.

Frankfurt’s Dax 30 fell by 0.87% to 7,874.74 points and in Paris the Cac 40 was off by 1.32% at 3,754.96.

In Madrid, the Ibex 35 index shed 1.81% to 7,904.3 points, in Milan the FTSE Mib slumped by 2.28% to 15,200 points, and in Lisbon the PSI-20 index plunged by 3.54% to 5,587.13 points amid uncertainty over an anticipated court ruling on the country’s 2013 budget.

In general, analysts noted a gloomy atmosphere owing to figures which indicated a slowdown in the huge US services sector on top of weak employment prospects in the world’s biggest economy, which together raised concerns about its recovery.

In New York, US stocks had opened higher before falling into the red with the Dow Jones Industrial Average off by 0.44% at 14,597.41 points in midday trading.

The broad-based S&P 500 was down by 0.63% at 1,560.30, while the tech-rich Nasdaq Composite showed a loss of 0.54% to 3,237.34 points.

Back in Britain, Vodafone’s share price dropped 3.05% to 186.15 pence after the US telecommunications giant Verizon distanced itself from press speculation regarding a potential merger with the British group.

“As Verizon has said many times, it would be a willing purchaser of the 45% stake that Vodafone holds in Verizon Wireless,” the US company said in a statement.

“It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others,” Verizon said in a statement filed Tuesday with the Securities and Exchange Commission.

Various media reports had said that Verizon was mulling a joint attack with AT&T that would see the pair divide up Vodafone assets.

Shares in upmarket notebook maker Moleskine made a lacklustre debut in Milan yesterday as growth concerns and broad market weakness weighed on this year’s first major stock listing in crisis-hit Italy.

The maker of notebooks based on originals used by Ernest Hemingway and Bruce Chatwin is the first company to join the main Milan stock market since the listing of cashmere brand Brunello Cucinelli nearly a year ago.

Shares in Moleskine closed 0.9% below their issue price at €2.28, though Italy’s all-share index fared worse, losing 2.28%.

Moleskine shares had risen nearly 3% in early trade from the €2.30 price the company had set for its €488mn ($626.5mn) initial public offering (IPO).

In foreign exchange trade yesterday, the euro rose to $1.2852 from $1.2813 late in New York on Tuesday. Gold prices dropped to $1,574.75 an ounce from $1,583.50.