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Europe: World equities soft as Fed-led rally fizzles out

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[LONDON] Global equity markets were soft Thursday, weighed down by lower commodity prices at the end of a volatile quarter as a rally prompted by the US Federal Reserve's interest rate outlook fizzled out.

At the European close, Frankfurt's DAX 30 index was down 0.8 per cent and Paris sank 1.3 per cent as investors reacted to news that eurozone consumer prices fell this month despite the European Central Bank boosting its already massive stimulus programme to beat deflation.

Capital Economics analyst Jonathan Loynes called the inflation data "very weak", saying they kept "pr9essure on the Bank for yet more policy support".

Outside the eurozone, London shed 0.5 per cent as traders brushed aside official data showing Britain's economy grew faster than expected last year.

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"A mixed lead from Asia, a pullback in oil prices and end-of-month repositioning weighed on European markets on the final day of a very volatile first quarter," said Jasper Lawler, analyst at traders CMC Markets.

Wall Street treaded water on the eve of US jobs data.

World oil prices fell further on Thursday, extending the previous day's heavy losses as a smaller-than-expected increase in US stockpiles failed to stem worries about the stubborn global supply glut.

Copper also sank heavily, weighing on the resources sector.

"The sharp reversal in oil prices on Wednesday in combination with a four-week low in the price of copper has prompted some profit taking in UK-listed miners including BHP Billiton and Rio Tinto," noted Lawler.

World markets had soared Wednesday after Federal Reserve chief Janet Yellen indicated that the US central bank was unlikely to raise interest rates in the first half of this year, citing ongoing concerns about the slow global economic growth.

But Asian equities experienced mixed fortunes on Thursday as profit-taking set in, one day before the release of key economic data in China and the United States.

On Thursday, Tokyo lost 0.7 per cent, while Shanghai eked out a 0.1 per cent gain.

Elsewhere Hong Kong finished 0.1 per cent lower, Singapore lost 1.3 per cent and Seoul shed 0.3 per cent. Sydney finished with a gain of 1.5 per cent.

Investors will now be watching out for China's March manufacturing activity, released Friday, for the latest snapshot of the mainland economy. That is followed by official US jobs figures later in the day.

In Hong Kong, shares in Chinese firm Dalian Wanda Commercial Properties soared 20 per cent after its parent firm said it was considering buying back all its shares - just 16 months after listing.

Billionaire Wang Jianlin, who owns Dalian Wanda Group, is looking to buy the firm back for HK$48 a share, the price it listed, marking a 24-per cent premium to its Wednesday close.

Analysts say he has likely become disillusioned with its performance.

The firm's stock has tumbled since listing as China's property market has been hammered by a slowdown in the world's number two economy.

Ratings agency Standard & Poor's (S&P) on Thursday cut its outlook on China from stable to negative, warning that economic rebalancing was taking longer than expected.