European stocks drift lower

European stock markets fell yesterday as profit-taking set in ahead of the New Year and after the Tokyo market ended 2010 on a weak note.

London’s FTSE 100 dropped 0.18 per cent to 5,986.07 points, Frankfurt’s DAX 30 index shed 1.01 per cent to 6,924.74 points and the Paris CAC 40 lost 0.70 per cent to 3,863.23 in early afternoon trade.

The Stoxx 50 index of leading eurozone companies declined 0.87 per cent to stand at 2,816.27 points.

Investors were awaiting the release of US jobless claims and home sales data yesterday, one day before European trading ends for the year.

Despite falling ahead of the figures’ publication, the FTSE 100 is on course to have risen by about 10.5 per cent in 2010 and the DAX by around 16 per cent.

However, the Paris CAC is down more than two per cent since the start of January and Spain’s IBEX index is lower by over 17 per cent.

Spain’s Prime Minister José Luis Rodriguez Zapatero yesterday predicted that the indebted country would see a return to positive economic growth in the fourth quarter after three months of stagnation.

In company news meanwhile, there were mixed updates for Airbus, the European planemaker run by aerospace giant EADS.

An Airbus spokesman said the company had delivered 18 A380 superjumbo airliners this year, less than its reduced target of 19, but is likely to set a new annual record of more than 500 aircraft of all kinds delivered.

In a further boost, China Eastern Airlines said it had signed an agreement with the Europe-based Airbus aviation consortium to buy 50 A320 airliners with a list price of $3.22 billion.

Elsewhere in Asia yesterday, Tokyo’s stock market ended its year with a loss of 1.12 per cent as the yen sharply rose back towards a 15-year high, hurting exporters, traders said.

The headline Nikkei index ended at 10,228.92 points, meaning the Nikkei had lost 3.01 per cent over the 12 months.

US stock markets had drifted upward on Wednesday, eking out fresh gains that kept the Dow index at two-year highs.

With little driving the market except momentum, the Dow Jones Industrial Average rose 0.09 per cent to 11,585.38 points at the close on Wall Street.

“Despite a clear lack of interest among traders on the Street with volume anaemic as some remain on holiday breaks and the New Year approaches, the US equity markets are drifting higher to add to the solid gains for 2010,” said analysts at Charles Schwab.