European stocks end mixed as US data snuffs out rally

AFP/LondonEuropean stocks ended flat or down yesterday with disappointing US data erasing gains made on hints from a European Central Bank council member about a possible eurozone interest rate cut. Sentiment was also boosted after Germany’s parliament approved an international bailout package for stricken eurozone member Cyprus by a large majority, but rumours about a French bank running into trouble briefly sent markets sharply down. At the end of an erratic session, London’s FTSE 100 index of leading companies closed essentially unchanged at 6,243.67 points, losing less than a point. In Paris the Cac 40 also ended nearly flat at 3,599.36 points, but in Frankfurt the Dax 30 slid 0.39% to 7,473.73 points. In foreign exchange activity, the European single currency firmed to $1.3075, from $1.3028 late in New York on Wednesday. Gold rose to $1,393.75 an ounce on the London Bullion Market from $1,392. It had Tuesday struck a two-year low at $1,321.95 on weaker-than-expected Chinese economic growth data. “Europe’s markets initially had a slightly more stable tone today” on the German approval of the Cyprus bailout and a succesful Spanish bond auction, said CMC Markets UK analyst Michael Hewson. “In the afternoon session however equity markets started to roll over on vague chatter that a French bank might be in trouble and this, in turn, sent banking stocks sharply lower,” he added. Markets had also been hit Wednesday by swirling speculation over a possible credit rating downgrade for Germany. However yesterday, international ratings agency Moody’s issued a credit update maintaining Germany’s top “Aaa” rating, albeit with a continued negative outlook. The agency emphasised, however, that its annual credit report on Germany “is an annual update to the markets and does not constitute a rating action”. US stocks slid yesterday, weighed down by the Conference Board’s index of leading economic indicators turning in an unexpected drop of 0.1% in March, the first decline since August 2012. First-time unemployment claims also rose slightly last week. In midday trading, the Dow Jones Industrial Average shed 0.42% to 14,557.30 points. The broad-based S&P 500 lost 0.53% to 1,543.82 points, while the tech-rich Nasdaq Composite Index fell 0.86% to 3,177.23 points. The mixed results came on the heels of Wednesday’s sharp losses that followed weak earnings reports and dreary economic sentiment in Europe. Markets are troubled by the “pummelling” that copper and other commodities have taken in recent days, said Briefing.com analyst Patrick O’Hare. The drop in base metals “has raised a number of flags as it pertains to the growth outlook,” O’Hare said.