LONDON: Trading on European stock markets produced mixed results on Tuesday as poor British economic data competed with better news from Spain, where borrowing costs eased as Madrid sold plenty of short-term debt in a sign of improving market confidence.
Business activity across much of Europe was hampered meanwhile by a heavy late-winter snowfall.
London's FTSE 100 index of leading companies rebounded from slight early losses to gain a modest 0.11 percent and close at 6,510.62 points.
Frankfurt's DAX 30 was 0.23 percent lower at 7,996.12 points while in Paris the CAC 40 was up by just 0.10 percent at 3,839.97.
In Madrid the Ibex 35 was off by 0.26 percent at 8,532.30 points, and in Milan the FTSE Mib fell by 0.42 percent to 16,024 points.
Market sentiment received some support from Spain, the eurozone's fourth-biggest economy, where the government sold 5.832 billion euros ($7.60 billion) in short-term debt amid demand that was more than double the supply, a central bank statement said.
That helped offset "more abysmal data out of the UK this morning (that) has once again prompted talk of a triple dip recession," according to Craig Erlam, market analyst at Alpari trading group.
British manufacturing output slumped by 1.5 percent in January compared with December, official data showed, while a wider measure of industrial production that includes mining and quarrying, electricity, gas and water supply dropped by 1.2 percent in January from December.
In New York, US stocks opened lower as investors marked a pause after a series of gains took the Dow to another record close on Monday.
In midday trade, the Dow Jones Industrial Average was still down, albeit by a slight 0.10 percent, the broad-market S&P 500 had fallen by 0.30 percent and the tech-rich Nasdaq Composite had dropped by 0.53 percent.
Back in Germany, Europe's biggest economy, Frankfurt Airport slowly resumed operations after being forced to close early in the day by heavy snow which also forced Eurostar to suspend cross-Channel train service between London and Paris.
In foreign exchange trade, the euro edged down to $1.3028 from $1.3046 late on Monday in New York. Sterling hit a more than 2.5-year low at $1.4832 in the wake of the very weak British economic data, but then edged back up to $1.4885.
Gold prices grew to $1,594.00 an ounce on the London Bullion Market from $1,579.00 on Monday.
While Spain was looking good on sovereign debt markets, Italy, which has the third biggest eurozone economy, also issued 7.75 billion euros in short-term debt on Tuesday, but at a higher rate compared with a previous bond auction.
On Friday, Fitch downgraded Rome's sovereign debt by one notch to "BBB+" in large part owing to uncertainty generated by upcoming elections.
But lighter borrowing costs for Spain held out hope for the eurozone's fourth-biggest economy, which faced speculation last year that it would need a sovereign bailout to rescue its public finances.
In late trading on public debt markets, Spanish 10-year bonds traded with a yield of 4.724 percent, down from 4.760 percent on Monday and close to their lowest level since mid November 2010.
Italian 10-year bonds traded at 4.603 percent, down from 4.639 percent on Monday even though Italy had to offer slightly higher rates in a direct sale of 12-month debt earlier in the day.
In France, the eurozone's second-largest economy, President Francois Hollande acknowledged that the country's public deficit would probably amount to 3.7 percent of national output this year, publicly renouncing his government's goal of coming in below the EU limit of three percent.
Elsewhere, Asian stock markets finished lower as profit-takers moved in to reverse earlier gains, but the dollar extended its recent upward trend against the Japanese yen.
The regional losses came despite Monday's record-high close for the Dow Jones index on Wall Street, while Shanghai suffered another steep fall after the weekend's disappointing data on the Chinese economy.
<Center><b><i>Copyright AFP (Agence France-Presse), 2013</b></i></center>
Comments
Comments are closed.