European stocks wilt in listless trade

European stock exchanges wilted yesterday but losses were far less dramatic than those of last week in listless trading on a day when Wall Street was closed for US Independence Day celebrations.

Markets in Europe suffered last week from renewed fears over the health of the global recovery in the face of disappointing US data, notably a surprising erosion in US consumer confidence.

A report on Friday that the US economy had lost jobs in June for the first time this year added further tension.

A fall in the jobless rate to 9.5 per cent of the workforce failed to lift investor spirits, as it largely reflected decisions by discouraged workers to abandon their search for a job.

Market players are now focusing on US data to be released later this week as well as the start of the corporate reporting season.

"The most important indicator this week will be the ISM index of US non-manufacturing activity for June," said analysts with the Aurel brokerage house.

"It should be slightly weaker than the previous month but still indicative of growth." The index is to be published today.

In London yesterday, the FTSE 100 index shed 0.30 per cent to close at 4,823.53 points while in Paris the CAC 40 lost 0.48 per cent at 3,332.46 points. In Frankfurt, the DAX fell 0.31 per cent to 5,816.20 points.

Elsewhere there were declines of 1.18 per cent in Milan, 0.63 per cent in Amsterdam and 0.54 per cent on the Swiss Market Index. Madrid bucked the trend and rose 0.33 per cent.

Asia-Pacific stocks traded mixed earlier yesterday, with caution also prevailing during the US holiday against a background of continued global economic worries.

"With Wall Street having posted a rather mixed finish last week ahead of the long holiday weekend, Asian markets have struggled to find much meaningful direction," said IG Index research analyst Ben Potter.

"So long as this concern over slowing global growth - and the risk of a double dip (into a new recession) - remains, then there is arguably going to be little reason to start engaging in any serious buying."

Tokyo rose 0.69 per cent while Hong Kong slid 0.32 per cent. Elsewhere, Sydney was down 0.39 per cent and Shanghai 0.80 per cent.

In Paris retailer Carrefour was a winner on the day, gaining 2.91 per cent on press reports that it planned to sell assets in southeast Asia that could earn it a billion dollars.

Banks were generally weaker. Credit Agricole fell 1.27 per cent after carrying out a bond issue worth €1.25 billion. BNP Paribas fell 1.71 per cent.

The German finance sector was likewise affected by market nervousness about the broader economy. Commerzbank fell 0.85 per cent and Deutsche Boerse 1.31 per cent.