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European equities slip before EU summit outcome

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(Globalpost/GlobalPost)

Europe's main stock markets fell on Friday in downbeat pre-weekend deals before the outcome of a major European Union summit that seeks to agree a bailout for the Cyprus government, dealers said.

Sentiment was also dented ahead of triple witching day, when stock index futures, index options and stock options all expire together.

London's benchmark FTSE 100 index of top companies slid 0.23 percent to 6,514.50 points in late morning deals.

Elsewhere, Frankfurt's DAX 30 index dipped 0.12 percent to 8,048.94 points and in Paris the CAC 40 reversed 0.68 percent to 3,861.81.

In foreign exchange activity, the euro firmed to $1.3059 from $1.3003 late on Thursday in New York. Gold prices increased to $1,592.85 an ounce on the London Bullion Market from $1,586.

Eurozone veteran Jean-Claude Juncker said Friday that Eurogroup finance ministers meeting later in the day must agree on a bailout for the near-bankrupt Cyprus government.

"The Cyprus question should not just be brought closer to a solution -- it should be solved," Luxembourg Prime Minister Juncker told reporters in the early hours at the close of a gathering of eurozone leaders held in the middle of a two-day European Union summit.

Asked if he foresaw a deal being reached at the finance talks set for 1600 GMT, after the EU meeting ends, the recently-departed Eurogroup chairman said: "I can't imagine that we would let the weekend pass without having solved the Cyprus problem."

European stocks had closed higher on Thursday on upbeat news that Ireland could become the first eurozone nation to emerge from its bailout programme, and following a decline of US jobless claims for a third straight week.

"Eurozone problems are back in focus -- even though the Cyprus bailout was not on the agenda, the issue is expected to be discussed on the second day of the EU summit," said Gekko Markets analyst Anita Paluch on Friday.

She added: "European stocks are struggling for direction as caution prevails ahead of the triple witching, when options and futures contracts will expire."

Asian equity markets were mixed on Friday following another strong lead from Wall Street, where traders took heart from more upbeat US jobs numbers.

The yen was flat meanwhile after Japanese lawmakers gave final approval to the government's nominees to take the helm at the Bank of Japan, with expectations high that it will usher in more aggressive monetary easing.

Tokyo stocks rallied 1.45 percent to 12,560.95, its highest level since September 2008, while Sydney bounced back from three days of losses to register its biggest rise since July, adding 1.75 percent to close at 5,120.2.

On the downside, Hong Kong finished 0.38 percent lower and Seoul fell 0.78 percent in value.

Overnight on Wall Street, traders welcomed US Labor Department data showing new claims for unemployment benefits fell last week for the third week in a row, signalling continuing improvement in the jobs market.

The S&P 500, which includes all major segments of the US economy, climbed 0.56 percent to end just short of its all-time high close set in October 2007.

And the Dow was up 0.58 percent, breaking its all-time record for the eighth straight day. It was the Dow's 10th consecutive rise.

Later on Friday, dealers will digest a barrage of US data including inflation, manufacturing and confidence.

At the same time, trade was widely expected to be driven by technical deals due to triple witching, analysts noted.

"With triple witching today there might be a little volatility ahead of options and futures expiry, and things might get a little more exciting later with the US data due," added Angus Campbell at traders Capital Spreads.

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http://www.globalpost.com/dispatch/news/afp/130315/european-equities-slip-eu-summit-outcome