European Stocks Slip Ahead of Eurozone Meeting
European stocks fell on Thursday in cautious deals before this week's EU finance meeting which is expected to approve a boost in the firewall against future financial turmoil.
In late morning trading, London's FTSE 100 index of top shares slid 0.69 percent to 5,768.40 points, Frankfurt's DAX 30 shed 0.78 percent to 6,944.74 points and in Paris the CAC 40 fell 0.49 percent to 3,410.46.
Madrid's Ibex 35 lost 0.32 percent to 7,955.30 points amid a 24-hour general strike in protest at a new law facilitating lay-offs at a time of towering unemployment, recession and state austerity cuts.
And Milan's FTSE Mib index sank 0.75 percent to 16,326.77 points, despite news of a successful Italian bond auction.
Meanwhile, Eurozone governments are debating whether to combine the lending capacity of the temporary European Financial Stability Facility, used to rescue Portugal, Ireland and Greece, with the permanent European Stability Mechanism.
The Eurozone is mulling temporarily raising the size of its debt rescue mechanism to 940 billion Euros before lowering it, two European sources close to the discussions said late Wednesday.
The proposal will be presented to finance ministers meeting on Friday and Saturday in Copenhagen amid growing concerns about Spain's finances.
Later on Thursday, investors will digest the third and final estimate of US fourth-quarter economic growth, alongside unemployment claims data.
"With U.S. GDP revisions out today and a Eurozone summit scheduled for tomorrow, the hope now is that the bulls can engineer a rally based on continued strength in US data and an agreement to bolster the Eurozone's bailout fund," said IG Index analyst Chris Beauchamp.
"After such a strong quarter, this rally is ending with a whimper rather than a bang, perhaps understandably given the run-up in global markets.
"With a Spanish strike and an Italian bond auction, there is enough to keep investors on edge in advance of the European meeting in Copenhagen tomorrow."
In foreign exchange deals, the European single currency edged up to $1.3320 from $1.3316 in New York late on Wednesday.
At the same time, bond yields in Spain and Portugal remain high owing to concern about the simmering Eurozone debt crisis, dealers said.
"The problem of rising bond yields in Spain and Portugal merely reflects market concerns about the ability of these two economies to get their deficits under control in the face of rising unemployment and falling growth, as well as popular hostility amongst their populations," said CMC Markets analyst Michael Hewson.
Asian markets slipped on Thursday as more weak economic data out of the United States and Britain stoked concerns about the global economy.
Tokyo stocks fell 0.67 percent, Sydney was 0.13 percent lower and Seoul dropped 0.85 percent. Hong Kong shed 1.32 percent and Shanghai lost 1.43 percent.
The losses followed a fall on Wall Street after figures from the U.S. Commerce Department showed a slower-than-expected rise in new orders for manufactured durable goods.
That came after an index of U.S. consumer confidence on Tuesday showed a slip, while home prices continued to fall in January.
The results -- added to a cool assessment of the U.S. economy by Federal Reserve chief Ben Bernanke -- come after a run of upbeat jobs data that had lifted hopes the recovery is picking up.