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Europe: Stocks close lower on Greece jitters


[LONDON] European stock markets closed significantly lower Tuesday following mixed eurozone data and contentious Greek bailout talks, while London's main index failed to gain after an upgrade of British economic growth.

London's benchmark FTSE 100 tumbled 1.72 per cent to end the day at 6,773.04 points.

Frankfurt's DAX 30 index slumped 0.99 per cent to close at 11,966.17 points, while the CAC 40 in Paris lost 0.98 per cent to 5,033.64 points.

The euro fell to US$1.0740 from US$1.0825 late in New York on Monday.

"Investors continued to focus on the failings of region-wide core inflation and unemployment alongside the Greek stalemate that is acting as a perpetual backdrop to the trading situation in the eurozone," said Connor Campbell, analyst at Spreadex trading group.

Deflation in the eurozone eased in March, official data showed Tuesday, reducing concerns that the economy faces a dangerous spiral after four straight months of falling consumer prices.

Another boost came from Germany, where unemployment fell in March to the lowest level since the country reunited in 1990, as the recovery in Europe's biggest economy continues to pick up speed.

But with a cash-strapped Greece in a bitter row with its European partners and on the cusp of tumbling out of the euro, analysts fear that a new debt crisis in the eurozone could affect the world economy.

In Britain, data showed its economy grew faster than expected in the final quarter of last year.

Gross domestic product expanded by 0.6 per cent in the last three months of 2014, up from a previous estimate of 0.5 per cent, the Office for National Statistics said in a statement.

The state of Britain's economy is in sharp focus as the country gears up for a general election in early May, while analysts said the outlook appeared less rosy.

"Combined with falls in construction output and industrial production, the economy contracted by around 0.3 per cent in January," said Simon Wells, chief UK economist at HSBC.

"Unless there is a sharp bounce back, first-quarter growth could conceivably be around half its 2014 fourth-quarter rate. This is not good news for the government ahead of the 7 May election." On the corporate front, shares in Kingfisher surged after Europe's biggest home-improvements retailer said it would close 60 stores in Britain and Ireland, a day after pulling out of a takeover for French chain Mr Bricolage.

The market cheered also the promise of dividend payments to shareholders.

Shares in Kingfisher closed up 4.33 per cent to 380.60 pence after rising as high as 383.3 pence, topping the risers board on London's FTSE 100 index.

Wall Street was also lower on Tuesday, with mid-day trading on the Dow Jones Industrial Average slumping by 0.50 per cent, and the tech-rich Nasdaq Composite Index slipping 0.44 per cent. By contrast, the broad-based S&P rose by 1.22 per cent.

Even a better-than-expected consumer confidence figure couldn't change the bearish tides, with the Dow Jones following the lead of the DAX and the FTSE by posting significant losses after the bell.