Europe’s main stocks markets fell yesterday as key G20 talks amid talk of a possible “currency war” overshadowed positive company earnings and economic data.

London’s FTSE 100 index slipped 0.29 per cent to 5,741.37 points, while in Paris the CAC 40 slid 0.25 per cent to 3,868.54 points and in Frankfurt the DAX dipped 0.08 per cent to finish at 6,605.84 points.

Elsewhere Milan dropped 0.37 per cent, Amsterdam 0.25 per cent and the Swiss Market Exchange 0.54 per cent. Madrid bucked the trend and booked a 0.30 per cent gain.

“There is an eye towards the G20 meeting in South Korea where the market will watch with eager anticipation any resolution to the much published currency wars,” said Joshua Raymond, an analyst at trading firm City Index.

“The key to equity markets will be any impact on the price of the US dollar. A weak dollar has been hugely beneficial to indices of late as they have charged the prices of metals and crude oil which have as a result triggered reciprocal bullish moves in the share prices of key miners on the FTSE 100.”

Finance ministers of the Group of 20 developed and emerging economies met in South Korea to discuss efforts to avert a “currency war” as nations devalue their currencies to protect their exports.

Most analysts doubt whether the meeting would lead to a substantial agreement on a thorny issue that has pitted the United States against China.

The US greenback has declined steadily in recent weeks amid increased expectations that the Federal Reserve will resume spending policies to boost the economy, effectively printing money. Trading was also restrained on Wall Street, with the blue-chip Dow Jones Industrial Average slipping 0.14 per cent to 11,130.79 points at midday.

The broader S&P 500 index gained 0.03 per cent to 1,180.65 points, and the tech-rich Nasdaq composite index climbing 0.56 per cent to 2,473.45 points.

“Watch the dollar and that’s basically all you need to see to know where the stock market is headed. If the dollar is weak, stocks are up. If the dollar is strong, stocks are down,” said analysts at Briefing.com.

The dips in European markets came despite good corporate earnings and data.

In London, the share price of BSkyB rose 0.72 per cent to 702.5 pence after the pay-TV giant being courted by Rupert Murdoch’s News Corp. reported a surge in quarterly profits. The British group said profit after tax jumped to £228 million (£257 million) in the three months to September 30 – the group’s first quarter, as it edged closer to its 10 million customer target.

Elsewhere, a survey published on Friday showed German business managers are surfing a wave of confidence. The Ifo economic research institute said its business confidence index climbed to 107.6 points in October from 106.8 points in September – hitting the highest level since May 2007.

Analysts had forecast a drop, while the findings are in line with recent data that show the German economy, the biggest in Europe and the eurozone locomotive, on a roll thanks in part to growing exports.

Volkswagen, the biggest European carmaker, reported a trebling of its operating profit in the first nine months of the year to £4.8 billion, with sales climbing 19.9 per cent to £92.5 billion. Shares in the automaker climbed 3.01 per cent to £85.28. Asian markets were mostly higher in cautious trade.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.