Mounting global woes weigh on Europe

European stocks struggled yesterday, as investors fretted over the global impact of the eurozone crisis and poor US earnings but sentiment was partly boosted by a new Spanish austerity package. At the close, London’s FTSE 100 index of top companies was unchanged at 5,664.48 points. In Paris the CAC 40 fell 0.57% to 3,157.25 but Frankfurt’s DAX 30 index eked out a 0.25% gain at 6,453.85 points. Madrid bounced into positive territory as dealers welcomed the Spanish government’s vast €65bn ($80bn) austerity package aimed at stabilising the public finances. The IBEX 35 index rose 1.17% to 6,805.9 points. However, Italy’s stock market edged lower on persistent worries that debt-laden Rome may have to tap a eurozone rescue fund. The FTSE Mib index was off by a slight 0.05% at 13,861 points. “Global growth storm clouds continue to gather,” commented dealer Jonathan Sudaria at the trading group Capital Spreads. The euro meanwhile dipped to $1.2242. That compared with $1.2251 in New York late Tuesday, when it had slumped to $1.2235 - the lowest point since July 1, 2010. In Berlin, Germany’s finance minister urged the country’s top court to rule quickly on legal challenges to euro crisis-fighting tools. “We have asked the court to decide as quickly as possible because we are in an extraordinarily critical situation. The risk of contagion to the whole eurozone is very high,” Wolfgang Schaeuble told German radio. In Madrid, coal miners threw rocks, bottles and firecrackers at riot police who fired rubber bullets as tens of thousands protested mining subsidy cuts. Spanish Prime Minister Mariano Rajoy had earlier unveiled the massive austerity package to avert financial collapse. In New York, markets edged mostly lower in midday trading, with the Dow Jones Industrial Average down 0.20% to 12,627.61. The tech-rich Nasdaq fell 0.44% to 2,889,64 and the broader S&P 500 was flat at 1,340.87. Mike McCudden, head of derivatives at Interactive Investor, said: “It’s risk-off time once again as the latest batch of US earnings brought home the impact of depleted confidence and a slowing global economy. “This will no doubt usher in yet another round of (stimulus) chatter but in the face of continued eurozone woe, with leaders evidently not in a hurry to get the job done, investors will feel safer investing their cash under the mattress.” Market sentiment was also battered on Tuesday after Italian Prime Minister Mario Monti said that Rome might one day ask for the eurozone rescue fund to intervene in its bond market in order to ease his country’s borrowing costs. from gulf times.