European stocks steady, euro dips

25 Oct 2012, 7:00 am   -   Source: AAP
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London's benchmark FTSE 100 index of top companies on Wednesday was flat at 5,797.91 points in late morning deals. (AAP)

London's benchmark FTSE 100 index of top companies on Wednesday was flat at 5,797.91 points in late morning deals. (AAP)

European stocks are holding steady but the euro has dipped ahead of the Fed's US interest rate decision. 

European stock markets have steadied a day after sharp falls, and the euro fell as traders digested mixed economic data before the outcome of the Fed's monetary policy meeting.

London's benchmark FTSE 100 index of top companies on Wednesday was flat at 5,797.91 points in late morning deals, Frankfurt's DAX 30 edged up 0.03 per cent to 7,175.91 points and in Paris the CAC 40 gained 0.27 per cent to 3,415.80.

Madrid's IBEX 35 index firmed 0.13 per cent to 7,757.60 points.

"The rush of selling appears to have subsided for now, but this may just be a pause in the current bout of risk aversion," said Chris Beauchamp, analyst at IG trading group.

"Yesterday's sharp drops were prompted by weaker earnings figures, and even a shiny new gadget from Apple failed to lift the mood."

In foreign exchange trading, the euro fell to $US1.2929 from $US1.2978 late in New York on Tuesday. Gold prices slipped to $US1,708.35 an ounce on the London Bullion Market from $US1,711 an ounce on Tuesday.

European Central Bank president Mario Draghi was to defend his euro-crisis strategy in the German parliament on Wednesday after his plan to buy bonds of struggling nations came under fire in Germany, Europe's top economy.

Draghi was scheduled to address members of the Bundestag lower house of parliament behind closed doors from 1.45pm local time (2245 AEDT) and then brief reporters about two hours later on what has been dubbed an "information visit".

The eurozone crisis was meanwhile increasingly hitting Germany, data suggested on Wednesday with business confidence falling for the sixth month in a row to the lowest level since February 2010.

The Ifo economic institute's closely watched business climate index dropped to 100.0 points in October from 101.4 points in September, disappointing analysts surveyed by Dow Jones Newswires who had expected a slight rise.

"Markets can live with poor figures from most of the eurozone, but disappointment from the union's strongest pillar is perhaps more than investors can bear," said Beauchamp.

"Even better data from China, where the HSBC PMI indicated signs of recovery, was not enough to put markets on the front foot," he added.

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