European stocks down despite Ifo

European shares traded lower yesterday, led down by mining and tech stocks and uninspired by a strong reading on Germany's key business confidence index.

At 1232 GMT, the FTSEurofirst index of more than 300 top European shares was down 0.65 per cent at 1,477.87 points, with top French stocks down 0.9 per cent, German bluechips down 0.7 per cent, and Britain's FTSE 100 down 0.6 per cent.

Tech stocks were hurt by US software maker Oracle, which posted weaker-than-expected sales of new software application licences on Monday. Oracle's main European rival, Germany's SAP was down 0.9 per cent.

The German Ifo business sentiment indicator produced its highest reading since reunification, surpassing all forecasts in a Reuters poll of 52 economists.

Stocks edged up only slightly on the news. "It's not really surprising to get a strong Ifo reading and it doesn't change the way we're looking at the European economy," said ABN AMRO European strategist Lars Kreckel.

"European economic numbers rarely tend to move equity markets that much. Anyway it's naive to try and decouple Europe from the United States economy - the one to watch is the US ISM index," he added.

Among individual stocks, exchange operator Euronext rose 2.4 per cent as shareholders voted in favour of a merger with the New York Stock Exchange.

British utility Centrica rose 2.7 per cent, helped by broker upgrades and vague bid talk, on which the company declined to comment.

The DJStoxx European basic resources index was down 1.4 per cent, spooked by weakness in Asian stock markets.

Thai stocks suffered their biggest crisis since Asia's 1997 financial meltdown as foreign investors took fright at drastic measures to rein in the baht.

"It's a general emerging markets contagion and concerns over economic growth," said one trader who specialises in the sector.