3:00 PM Frankfurt – European markets pared losses after a sharp decline in Japan dragged sentiment in Europe and Asia. World Bank lowered global growth estimate. Wholesale inflation in Germany declined for the second month in a row.
European markets opened lower after a sharp plunge in Japan and growing fears of unpredictable actions from the central banks in the U.S. and Europe.
The DAX index in Frankfurt dropped as much as 1.5% before recovering half the losses and the CAC 40 in Paris declined 0.7%. The FTSE 100 index in Paris fell 1.1%.
In addition, World Bank lowered its estimate of global growth to 2.2% from the previous 2.4% forecast released in January. The current assessment is for the slower growth than 2.3% in 2012.
On the economic front, wholesale price in Germany declined 0.1% in May from a year ago month after falling 0.4% in April. The second monthly decline surprised most economists who were looking for the prices to increase 0.2%.
Separately, France’s inflation in May increased according to the data released by the statistics agency Insee in Paris yesterday.
The harmonized index of consumer prices increased 0.9% in May from 0.8% in April and lowest increase since November 2009 when the index increased 0.5%.
In addition, Insee said French payroll employment declined 8,300 in first quarter after falling 41,200 in the last quarter of 2012.
Bank of France said yesterday, the French current account deficit was stable at 2.8 billion euros in April.
In the UK, the number of people claiming unemployment benefits decreased 8,600 in May from April. The data was released by the Office for National Statistics on Wednesday.
The number of unemployed declined 5,000 to 2.51 million in three months to April and unemployment rate was stable at 7.8%, the ONS said.
Stocks in Review
Rhoen-Klinikum soared 8% after shareholders voted to remove the 90% threshold for a takeover offer.
Banks traded lower and Societe Generale declined 1.5% and Credit Agricole fell 1.6%.
Royal Bank of London plunged 6% after the bank said its chief executive Stephen Hester by the end of the year and the company is looking to cut additional 2,000 staff.
Unite Group dropped 6% after the company proposed to sell as many as 16 million shares.
Heidelberger Druckmaschinen declined 2.7% after the machinery maker confirmed the annual earnings outlook.