European stock markets were mixed yesterday as investor enthusiasm waned over the US fiscal cliff deal that had sparked a rousing global rally on the first trading day of the year.

London’s benchmark FTSE 100 index of top companies added 0.33 per cent to close at 6,047.34 points, while Frankfurt’s DAX 30 index dropped 0.29 per cent to 7,756.44 points and the Paris CAC 40 fell 0.34 per cent to 3,721.17 points.

All three indices had surged by more than two percent on Wednesday, in a bright start to 2013, after US lawmakers agreed a deal to avert the so-called fiscal cliff.

On Wall Street, US stocks were also mixed in midday trading yesterday, with the Dow Jones Industrial Index down by a slight 0.06 per cent, the broad-based S&P 500 up by 0.11 per cent and the Nasdaq Composite adding just 0.05 per cent.

Back in Europe, Madrid’s Ibex-35 index lost 0.52 per cent but Milan’s FTSE Mib rose by 0.10 per cent, one day after both key peripheral eurozone countries had soared by more than three per cent.

While Democrats and Republicans in the US Congress reached a compromise, they also just delayed the imposition of spending cuts for two months, meaning another debilitating stand-off is almost certain at the end of February.

The rally on Wednesday was “overshadowed by concerns that US lawmakers have only kicked the can down the road like their European cousins have done through much of 2012,” ETX Capital analyst Ishaq Siddiqi noted.

In foreign exchange activity, the euro fell to $1.3110 from $1.3184 late in New York on Wednesday, when it had struck a two-week high at $1.3300.

Gold prices declined to $1,679.50 an ounce on the London Bullion Market from $1,693.75.

On secondary sovereign bond markets, 10-year debt issued by Spain traded at 5.026 per cent, down from 5.037 per cent on Wednesday, while the comparable Italian rates were 4.242 per cent, down from 4.276 per cent.

Asian equities traded mixed yesterday, with concerns over upcoming fights in Washington hurting sentiment. The yen clawed back some of its losses against the euro and dollar but remains under pressure on expectations of further monetary easing by the Bank of Japan.