European stocks drop as finance ministers meet

European stock markets dropped and the euro inched lower against the dollar on Tuesday as traders tracked a meeting of European finance ministers, digested German data and reacted to earnings and other company developments. London's benchmark FTSE 100 index of leading shares dipped 0.14 percent to 6,622.60 points in midday deals, compared with Monday's close. Frankfurt's DAX 30 lost 0.16 percent to 8,266.20 points amid news that investment sentiment in Germany stabilised in May following a sharp decline the previous month. In Paris, the CAC 40 shed 0.37 percent to 3,930.49, while Madrid gave up 0.60 percent, with borrowing costs for Spain easing as the indebted eurozone nation raised more than 4.0 billion euros ($5.2 billion) in short-term debt. In foreign exchange trading, the European single currency eased to $1.2973 from $1.2975 late in New York on Monday. The dollar dipped to 101.38 yen from 101.82 yen Monday. The US currency had started off the week by reaching a 4.5-year high level of 102.15 yen. On the London Bullion Market, gold increased to $1,436.60 an ounce from $1,430.75. In Germany, Europe's biggest economy, it was revealed that the widely watched investor confidence index calculated by the ZEW economic institute rose fractionally by 0.1 point to 36.4 points in May after falling sharply last month. "Despite mostly positive economic data for the German economy, the ZEW indicator remains at the level of the previous month. This may be due to the still poor economic situation in the eurozone, that is also reflected by the recent ECB interest rate cut," said ZEW president Clemens Fuest. Separately, official data showed that industrial output in the 17-nation eurozone jumped by a surprisingly strong 1.0 percent in March compared with February, when it rose by 0.3 percent. Analysts said the March report did not necessarily mean that the worst of the eurozone's long recession had ended. Attention was meanwhile firmly on Brussels. "On a fairly light day for economic data, apart from the latest German ZEW survey and European industrial production numbers, we can once again amuse ourselves as European policymakers continue to bicker and squabble and tie themselves up in knots about the timing or otherwise of a banking union," said Michael Hewson, senior analyst at traders CMC Markets UK. European finance ministers on Tuesday haggled with Austria over bank data-sharing, as they seek to recover money from tax evasion that could help job creation and growth. In company activity meanwhile, shares in mining groups were among the biggest fallers amid strike action in South Africa and a day after India's Tata Steel announced a $1.6-billion asset writedown on slumping demand in its main European market. In Paris, top global steelmaker ArcelorMittal slid 1.94 percent to 9.767 euros, while over in London, miner Anglo American lost 3.11 percent to 1,528 pence and Glencore Xstrata dropped 2.40 percent to 337 pence. Shares in platinum miner Lonmin shares plunged 7.1 percent to 265.5 pence as thousands of workers downed tools at a mine in South Africa run by the London-listed group, after a union leader was shot dead at the weekend. On the upside, Severn Trent's shares rocketed 14.41 percent to 2,087.95 pence after the British water supplier said it had been approached by a consortium including Canadian and Kuwaiti investment companies regarding a possible bid. In Paris, EADS shares grew 1.78 percent to 41.93 euros after the European aerospace giant reported a near doubling of first-quarter net profit, boosted by a strong performance by its main subsidiary Airbus which makes airliners. But shares in GDF Suez fell by more than 3.0 percent after Groupe Bruxelles Lambert sold a stake of 2.7 percent in the business.