European stocks mixed despite German growth cut

Europe's main stock markets ended mixed on Wednesday despite investor sentiment being hit by more gloomy economic news as the World Bank and Germany cutting growth forecasts, traders said.

London's FTSE 100 index of leading companies slid 0.22 percent to 6,103.98 points, while Frankfurt's DAX 30 added 0.20 percent to 7,691.13 points and in Paris the CAC 40 gained 0.30 percent to 3,708.49 points.

Weighing on the euro was a report quoting Jean-Claude Juncker, head of the eurozone finance ministers' group and Luxembourg's prime minister, as saying that the euro's value was "dangerously high."

The European single currency subsequently edged down to $1.3302 from $1.3304 in New York late on Tuesday. On the London Bullion Market, gold prices dipped to $1,676.25 an ounce from $1,680.50.

"Weve seen a bit of a softer tone in equity markets today after the World Bank adjusted its growth forecasts downward for 2013," said Michael Hewson, Senior Market Analyst at CMC Markets UK.

The German government also slashed its growth forecasts, although this was largely expected, he added.

"Given the news flow today its hard to fathom why markets arent lower than they are, given the continued stream of bad news from the retail sector," added Hewson.

European equities had taken a knock on Tuesday after weaker-than-expected 2012 economic growth data for Germany.

But a rise in US industrial output of 0.3 percent in December, higher than expected, and better than expected bank results, helped European markets pick up in late trade.

In a heavy blow on Wednesday, Germany slashed its official 2013 growth forecast to 0.4 percent, compared with the prior estimate of 1.0 percent. However, it also forecast a solid rebound in 2014.

Meanwhile, the World Bank cut its 2013 global economic growth forecast to 2.4 percent, from the previous figure of 3.0 percent, and described the recovery as "fragile and uncertain".

And in more downbeat news, industry data showed on Wednesday that European auto sales plunged to their lowest point in 17 years in 2012, while French carmaker Renault announced 7,500 job cuts.

New car registrations in the European Union fell by 8.2 percent from their 2011 level to 12.05 million units last year, the European Automobile Manufacturers' Association said.

Asian stock markets closed lower on Wednesday as dealers took profits following recent gains, with Tokyo also suffering heavy losses as the yen rebounded strongly after weeks of steep declines.

Tokyo stocks plunged 2.56 percent, Shanghai slipped 0.70 percent, Seoul dropped 0.32 percent, and Hong Kong finished 0.10 percent lower, while Sydney gained 0.46 percent in value.

US stocks were mixed in midday trading. While earnings from leading Wall Street banks exceeded expectations, Boeing's 787 Dreamliner problems were cause for concern.

The Dow Jones Industrial Average was down 0.17 percent to 13,511.84 points.

The broad-based S&P 500 dipped 0.01 percent to 1,472.18 points and the tech-heavy Nasdaq Composite added 0.26 percent to 3,118.78.

While JPMorgan Chase and Goldman Sachs reported fourth-quarter profits that beat expectations, shares in US aerospace giant and Dow member Boeing fell more than four percent in early trading following the latest problem with its 787 plane.

Japan's two biggest airlines took half the global Dreamliner fleet out of service on safety grounds Wednesday after an emergency landing by an ANA flight.

Boeing shares later recovered to show a loss of 3.3 percent to $74.43 in midday trading.

burs-rl/wai