Global stock markets were mostly lower yesterday after figures showed the eurozone economy slumping to a virtual halt, prompting nervous investors to take quick profits in volatile trade.

Dealers said weak US housing data added to the negative tone, dampening hopes that a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel can come up with anything to steady sentiment after the past month’s wild rollercoaster ride.

“It would be better not to meet than to meet and not have anything useful to say,” commented Sony Kapoor of Re-Define, an economic think-tank, ahead of a planned 1630 GMT press conference by the two leaders.

In New York, the blue-chip Dow Jones Industrial Average was off 0.29 per cent at around 1600 GMT with the tech-rich Nasdaq Composite down 0.69 per cent.

Dealers there said investors took quick profits on gains made in the past few days as the markets bounced back from some of the worst losses seen since the onset of the global financial crisis in 2008. News that Fitch Ratings confirmed its top US credit rating was welcome after peer Standard and Poor’s cut its assessment but it had little immediate impact. In London, the FTSE 100 index of leading companies closed up 0.13 per cent to 5,357.63 points while in Frankfurt, the main DAX index fell 0.45 per cent to 5,994.90 points and the Paris CAC 40 shed 0.25 per cent to 3,230.90 points.

Elsewhere Madrid lost 0.40 and Milan fell 0.87 per cent but Swiss stocks gained 0.97 per cent. The euro slipped to $1.4424 from $1.4440 late in New York on Monday. Gold was at around $1,779 an ounce, up sharply from $1,739 late Monday as investors bought back into the traditional safe-haven asset.

In Asian trade earlier yesterday, markets were mostly lower despite sharp gains overnight in New York. Tokyo added 0.23 per cent and Seoul jumped 4.83 per cent but Hong Kong lost 0.24 per cent, Shanghai was down 0.71 per cent, Sydney shed 0.86 per cent and Mumbai ended 0.65 per cent down.

While London and Zurich were the only majors to close in positive territory, the European markets all came back from sharp early losses after disastrous eurozone figures showing the economy stalled in the second quarter.

Theeurozoneslumped to just 0.2 per cent growth in the second quarter from 0.8 per cent in the first and short of forecasts for 0.3 per cent. Even more shocking was the slump in the Germany, Europe’s powerhouse economy, to just 0.1 per cent from 1.3 per cent in the first three months.

Analysts said governments were now in the worst of both worlds, trying to cut debt by slashing spending and raising taxes, a double squeeze which kills growth and makes stabilising the public finances even more difficult.

“The news is not good and the markets will look at German weakness as a sign that the necessary financial ammunition is not there to keep” the eurozone afloat, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London.

“Perhaps ... this recent sign of weakness in Germany will lead to a more urgent feeling on the part of the German government that something needs to be done, and very soon at that.