European stocks mixed as growth said to be at risk

European stock markets were mixed on Thursday after ECB chief Mario Draghi said there were risks to eurozone economic growth and as investors kept a close watch over escalating Korean tensions. In afternoon trading, London's FTSE 100 index of leading companies was down by 0.70 percent at 6,375.38 points, despite improved services sector data that raised hopes of Britain avoiding a third recession in five years according to analysts. Frankfurt's DAX 30 was a slight 0.06 percent higher at 7,879.16 points, while in Paris the CAC 40 had fallen by 0.37 percent to 3,741.10. As trading got underway in New York the markets were also mixed after unemployment claims unexpectedly jumped, offsetting positive market reaction to new stimulus measures by the Bank of Japan. Five minutes into trade, the Dow Jones Industrial Average rose 0.13 percent to 14,569.21 points. The broad-based S&P 500 0.08 percent higher to 1,554.90, while the tech-rich Nasdaq Composite Index fell 0.15 percent to 3,213.66 points. In Frankfurt, the head of the European Central Bank told a press conference that "weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half of this year, subject to downside risks." He spoke after the ECB held its key interest rates steady at 0.75 percent for the ninth month in a row, and after the Bank of England kept its main rate on hold at a record low of 0.50 percent while refraining from pumping more cash into the British economy. A a key survey showed that private sector business activity in the 17-nation eurozone fell sharply in March, adding to an increasingly gloomy outlook for the economy. The Markit Eurozone Composite Purchasing Managers Index dropped to 46.5 points, unchanged from the initial estimate but well short of February's 47.9 and the boom-bust line of 50 points. IHS Global Insight's chief European economist Howard Archer commented that "while the ECB made no policy changes at its April meeting, the overall tone of its statement and Mr. Draghi's comments were markedly more dovish and an interest rate cut from 0.75 percent to 0.50 percent now looks highly likely." In foreign exchange trade, the euro fell to $1.2784 from $1.2845 late on Wednesday in New York. Sterling was weaker against the dollar and euro, while on the London Bullion Market, gold prices climbed to $1,545.25 an ounce from $1,540.29 Wednesday. In Asia, attention was focused on the Korean peninsula, where tension has risen to a high level amid a standoff that pits North Korea against South Korea and its main ally, the United States and on policy moves by the Bank of Japan. Tokyo shares bounced and the yen tumbled after the BoJ unveiled a fresh raft of monetary easing measures, while its new leader promised to do what was needed to revive the stuttering economy. The Nikkei index closed up 2.20 percent to 12,634.45 points. The Nikkei index had slumped as much as 2.3 percent in the morning, with dealers concerned new BoJ governor Haruhiko Kuroda would fall short on promises to boost the economy. Other Asian markets slipped however, with Seoul hit by growing tensions on the Korean peninsula, analysts said. Seoul ended down 1.20 percent after North Korea blocked access to its Kaesong joint industrial zone with South Korea for the second day running. There were also reports that Pyongyang has moved a medium-range missile to its east coast.