Europe’s stock markets drifted lower and the euro struck a new 16-month low yesterday following mixed German economic growth data on the eve of key bond auctions and interest rate decisions in Britain and the eurozone.

At close, London’s FTSE index of leading companies fell 0.45 per cent at 5,670.82 points.

In Paris, the CAC-40 index lost 0.19 per cent to 3,204.83 points and in Frankfurt the DAX 30 dropped 0.17 per cent to 6,152.34 points.

Elsewhere in Europe, Madrid fell by 0.55 per cent, Lisbon by 0.83 per cent and Zurich by 0.71 per cent. Milan rose by 0.25 per cent.The euro dropped to $1.2662, a low-point since September 2010, before recovering some ground to $1.2684, still down from $1.2775 in New York late on Tuesday. The dollar gained slightly to 76.91 from 76.80 yen on Tuesday. US stocks also mostly fell, a day after a burst of buying sent markets higher on the promising first results of the corporate earnings season. In midday, trade the Dow Jones Industrial Average fell 0.31 per cent to 12,423.50 points, the broader S&P 500 lost 0.28 per cent to 1,288.41 points, but the Nasdaq Composite gained a slight 0.15 per cent to 2,706.45 points. Germany’s economy grew by 3.0 per cent last year but the eurozone debt crisis threw Europe’s biggest economy into reverse in the final months, official data showed yesterday.

“The latest print on Germany’s economic performance confirmed the robustness of the Europe’s second largest economy as the growth was in line with expectations,” said Anita Paluch at Gekko Global Markets.

“It cannot, however, be denied, that the growth has slowed down and as GDP contracted by about a quarter of a per cent in the last quarter, which causes grounds for concerns of Germany falling into recession.”