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European stocks fall after strong gains

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(Globalpost/GlobalPost)

European stock markets fell on Friday, as traders banked profits from the week's strong gains.

The gains came in response to positive US economic data and signs that the world's biggest economy may take time to wind down its stimulus programme, analysts said.

Gold prices dropped under $1,200 an ounce for the first time for nearly three years.

On stock markets, London's FTSE 100 index of leading shares dipped 0.12 percent to stand at 6,235.66 points approaching midday in the British capital.

Frankfurt's DAX 30 fell 0.18 percent to 7,976.19 points and in Paris the CAC 40 shed 0.59 percent to 3,740.13 compared with Thursday's closing values.

Madrid's main index lost 0.82 percent and Milan gave up 0.98 percent.

"European markets seems to have been completely absent from global macro themes of late, complacent to tow the line of whatever is going on in the US and Asia," said Jonathan Sudaria, a dealer at Capital Spreads.

Asian stock markets mostly rose on Friday after a US Federal Reserve official moved to soothe fears the bank would wind up its stimulus programme too soon. But concerns over a weaker Chinese economy lingered, traders said.

In Tokyo, Japan's Nikkei index led the gains as the dollar edged back towards the 100 yen mark, helped by a better-than-expected batch of economic data.

In later London foreign exchange deals, the euro rose to $1.3050 from $1.3038 late in New York on Thursday.

The dollar grew to 98.93 yen from 98.35 yen on Thursday.

On the London Bullion Market, the price of gold dropped to $1,180.50 an ounce -- the lowest point since August 2010. It later recovered to stand at $1,202.93 an ounce from $1,232.75 on Thursday.

Meanwhile official economic data Friday showed German consumers had returned to the shops in May, exceeding analysts' forecasts who had reckoned on a fourth monthly drop in retail sales in Europe's biggest economy.

Retail sales rose by 0.8 percent in May from the level in April, according to provisional adjusted figures by the federal statistics office Destatis.

Economists polled by Dow Jones Newswires had forecast an average 0.3-percent drop, on the heels of declines in the three previous months.

"The primary indicator of consumer spending in the eurozone's biggest economy provided quite a bright picture of German consumers' activity," said Gekko Markets trader Anita Paluch.

"It should not be surprising though; the strong labour market, low unemployment and rising wages buoy consumer confidence and make a promising statement for the future," she added.

France, the eurozone's second-biggest economy, said on Friday that its national debt rose to 91.7 percent of annual output in the first quarter of this year, amid rising concern about French public finances.

At the end of last year, the debt amounted to 90.2 percent of gross domestic product.

European Union rules require the public debt to be no more than 60 percent of output or falling towards this ratio.

In company activity, shares in ailing French auto group PSA Peugeot Citroen fell sharply amid reports, and a denial, that the US group General Motors could take control and inject cash.

PSA shares were showing a fall at midday of 2.54 percent to 6.34 euros. On Thursday the shares had jumped 5.47 percent in an initial response to a report that GM could take control.

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http://www.globalpost.com/dispatch/news/afp/130628/european-stocks-fall-after-strong-gains