European stocks steady after Greek deal failure

Europe's main stock markets steadied and the euro slid against the dollar on Wednesday after eurozone finance chiefs failed to strike a deal to unlock the latest batch of bailout cash for indebted Greece. The benchmark FTSE 100 index dipped 0.10 percent to 5,742.12 points approaching midday in London, Frankfurt's DAX 30 edged ahead by 0.04 percent to 7,175.81 points and the Paris CAC 40 inched up 0.03 percent to 3,463.19. The European single currency dropped to $1.2783 from $1.2818 late in New York on Tuesday. On the London Bullion Market, gold prices fell to $1,727.09 an ounce from $1,732.25 on Tuesday. "It would surely have been hoping for too much to expect some form of agreement from last night's Eurogroup meeting and so it has proved as the obstacles to an agreement continue to prove politically difficult," said Michael Hewson, senior analyst at CMC Markets trading group. "And once again markets wait as political theatre takes precedence over economic reality as we still await a decision on the next steps in this long drawn out saga surrounding Greece." The Eurogroup ministers said in a statement at the end of the Brussels talks that no deal had been reached and they would meet Monday "for further technical work on some elements of the package." The talks ended in the small hours of Wednesday. Traders had been buying the euro on expectations an agreement would be made. But the meeting ended with a statement saying only that they "made progress in identifying a consistent package of credible initiatives aimed at making a further substantial contribution to the sustainability of Greek ... debt." The major sticking point had been whether to give Greece, which is in desperate need of the 31.2 billion euros ($40 billion) handout, an extra two years to arrive at a point where it can raise its own funds. Ahead of the meeting, investors had been buoyed also by confidence that the United States would avoid a fiscal cliff of tax hikes and spending cuts. On the corporate front Wednesday, shares in Compass, the world's biggest caterer by sales, fell 1.13 percent to 701 pence after the British company said on Wednesday that its annual net profits dropped 17 percent owing to the cost of restructuring operations, particularly in troubled eurozone nations. Profit after tax slid to £605 million ($962 million, 754 million euros) in the 12 months to September 30 compared with net earnings of £728 million in 2010/11, Compass said in an earnings statement. Markets were looking ahead to the start of an extraordinary EU summit on Thursday called to agree a long-term trillion-euro budget. Already weakened by three years of economic crisis, the 27-nation bloc of half a billion people faces new trauma at the two-day summit after weeks of talks that have exposed stark divisions between pro- and anti-austerity nations. German Chancellor Angela Merkel said on Wednesday that the EU would need to hold a new summit on its budget in early 2013 if the bloc's leaders failed to agree this week on a 2014-2020 spending plan. "I don't know if we will have a definitive deal tomorrow or the next day -- we want that," Merkel told lawmakers during a debate on Germany's own budget. "If necessary we will have to meet again at the beginning of next year."