European stocks mixed ahead of G7 talks

European stocks were mixed on Tuesday after a four-day slump brought on by fears that the eurozone debt crisis was causing a global slowdown and ahead of G7 talks. In late morning trade, Frankfurt's DAX 30 fell 0.63 percent to 5,940.81 points, after new data showed that German industrial orders had fallen much more sharply than expected in April. In Paris the CAC 40 gained 0.45 percent to 2,967.71 points, while London markets remained closed for the jubilee holiday, curbing trade volumes. Madrid's IBEX 35 index meanwhile gained 0.51 percent to 6,272.40 points, as the treasury minister said Spain's problems were technically too great for a rescue while calling for a more federal Europe. On the foreign exchange markets, the European single currency slipped to $1.2434 from $1.2494 in New York on Monday. Over in Asia, Tokyo stocks finished up 1.04 percent and Hong Kong rose 0.40 percent with traders looking to a telephone conference call later in the day between finance ministers and central bankers of the Group of Seven. "Even if a little bit shy, the European markets were able to move into positive territory in the morning, lifted by the hopes what the G7 conference call ahead of the Los Cabos G20 summit may bring," Gekko Markets trader Anita Paluch said. "Also the service PMI figures weren't as bad as expected, showing a contraction at a slower pace than anticipated. "But nevertheless the concerns around the global economic slowdown stemming from a potential convergence of conditions prevail, which prevents the markets from a more decisive move," Paluch said. Eurozone private sector activity suffered its worst monthly slide in nearly three years in May with steep declines in Spain, Italy and now also France, but the slide was slightly better than an analyst expectations. The full Purchasing Managers Index (PMI) compiled by the research firm Markit fell to 46.0 points in May, down from 46.7 in April in the fastest rate of decline since June 2009 but a shade better than an estimate of 45.9 points. "Companies report business activity to have been hit by heightened political and economic uncertainty, which has exacerbated already weak demand," said Markit chief economist Chris Williamson. Finance ministers of the Group of Seven and other economic powers will talk by phone later Tuesday on the eurozone crisis and the weak European banks. Concern has mounted that some of Spain's banks could collapse without direct aid from Europe. Spanish Budget Minister Cristobal Montoro warned Tuesday it was technically impossible to rescue the debt-laden economy, the fourth largest in the eurozone. Many analysts fear the size of the economy would stretch the resources of existing European rescue mechanisms. "Spain needs more Europe, more mechanisms allowing the integration of Europe," Montoto said. But Germany has resisted adopting measures too quickly including allowing funds from the EU's financial firewall, the European Stability Mechanism, to be lent directly to banks rather than via governments. Nevertheless, the announcement of G7 telephone talks "rekindled hopes for a global solution" to the eurozone debt crisis, traders at Aurel BGC said in a note.