European stocks sink on eurozone debt

European stocks sank on Friday, despite gains in Asia, as investors reacted to eurozone debt tension over rising Italian and Spanish bond yields, and unexpectedly weak Chinese economic growth. In late morning trading, London\'s benchmark FTSE 100 index lost 0.48 percent to 5,682.86 points, Frankfurt\'s DAX 30 slid 0.98 percent to 6,677.45 points and in Paris the CAC 40 dipped 1.15 percent to 3,232.07. Madrid\'s Ibex 35 index tumbled 2.13 percent to 7,359.70 points and Milan\'s FTSE Mib index dropped 1.43 at 14,656.90. In foreign exchange deals, the euro declined to $1.3159 from $1.3188 late in New York on Thursday. \"European indices are weaker this morning, with Spanish and Italian markets coming under the greatest selling pressure,\" said analyst David Morrison at trading group GFT. \"Sovereign bond yields for both countries are higher, and the euro has so far failed to break back above 1.32 against the US dollar.\" He added: \"Investors were rattled by the news that Spanish bank borrowing from the European Central Bank (ECB) rose dramatically last month.\" Borrowing by Spanish banks from the ECB hit a new record in March at 227.6 billion euros ($299 billion) as they snapped up emergency cheap loans, official data showed. The figures from Spain\'s central bank are a sign of weak confidence in Spain\'s troubled financial sector, with commercial banks turning to the ECB since they are struggling to borrow on interbank lending markets. Spanish banks have found it hard to borrow money from banks in other eurozone countries because many in Spain are heavily exposed to the real-estate sector, which has been in a slump since a bubble burst in 2008. Italy and Spain remain in the market spotlight amid fears that the pair could be sunk by the long-running eurozone debt crisis, which has already resulted in vast EU/IMF bailouts for Greece, Ireland and Portugal. Elsewhere, Asian markets mostly rose Friday, after a strong rally on Wall Street, as dealers shrugged off news that China\'s economy grew at its slowest pace it almost three years in the first quarter of this year. However, the Chinese gross domestic product (GDP) data has cast a cloud over European markets. China\'s keenly-awaited GDP data showed that the Asian powerhouse economy grew just 8.1 percent in the first three months of the year, the weakest since the second quarter of 2009. The export-driven economy as hurt by the ongoing troubles in its key European and US markets, while demand at home was also weak. \"China\'s growth grinding lower as export and domestic demand cool down has dampened the market sentiment in today\'s European session,\" said Anita Paluch at Gekko Global Markets. She added: \"The weakness of the second largest world\'s economy is compounding the fears and problems the eurozone is facing at the moment.\" Friday\'s figures follow a string of bad results from Beijing that many analysts fear point to a sharp slowdown, which could have huge knock-on effects for other economies that rely on Chinese growth. Asian investors took their cue from a Wall Street surge that was driven by hopes the Federal Reserve will introduce fresh stimulus measures after a second straight week of rising jobs claims. The mood was also lifted by news that a North Korean rocket launch, which had raised regional security tensions, had failed. Hong Kong added 1.84 percent, Shanghai won 0.35 percent and Tokyo rose 1.19 percent, while Sydney gained 0.99 percent.