(MENAFN- AFP) Europe's main stock markets slid on Thursday in the wake of losses across Asia and on Wall Street -- and with all eyes on the Federal Reserve's position over stimulus.
Traders also digested more weak eurozone economic data and reports of a big shake-up at PSA Peugeot Citroen, the second biggest european automaker.
London's benchmark FTSE 100 index dropped 0.97 percent to stand at 6,444.71 points in midday trading.
Frankfurt's DAX 30 index fell 0.69 percent to 9,014.92 points and in Paris the CAC 40 decreased by 0.30 percent to 4,074.54 compared with Wednesday's closing values.
"European indices followed their US counterparts lower... as equity markets attempt to price in the possibility of a Fed taper, the prospect of which is becoming more real by the day," said CMC Markets senior trader Alexander Young.
"That the market is left to second guess both the timing and the size of any such reduction in the Fed's $85 billion bond purchasing programme has created sufficient uncertainty amongst traders to take some risk off the table in advance of today's US data."
While a bipartisan budget deal struck this week in Washington fuelled hopes that another government shutdown will be avoided next month, it is believed that the deal will also give the Fed more room to wind down the bond-buying scheme.
In foreign exchange on Thursday, the euro fell to $1.3772 from $1.3785 late in New York on Wednesday.
The European single currency dipped to 84.02 pence from 84.18 pence, while sterling was higher also against the dollar, at $1.6393 from $1.6374.
Gold prices dropped to $1,243.24 an ounce on the London Bullion Market from $1,260 on Wednesday.
In company news, shares in French carmaker PSA Peugeot Citroen nosedived 10.74 percent to 10.27 euros with talk a historic tie-up with China's state-owned Dongfeng coming into firmer focus.
Peugeot Citroen also said Thursday it would have to write about 1.1 billion euros off its full year earnings, hurt by worsening markets and unfavourable exchange rates in Russia and Latin America.
With few other catalysts to drive business, dealers are playing a wait-and-see game ahead of the Fed's policy announcement next week, with opinion split on whether it will begin reeling the stimulus in this month or early next year.
The Fed's $85 billion-a-month scheme has been credited with fuelling a global equities rally this year as it has supplied vast sums of cheap money to investors.
A series of strong recent data -- including falling unemployment and strong economic growth figures -- have strengthened the argument for a December cut, while this month a top Fed official indicated a small reduction could be on the cards.
Added to that was Tuesday's two-year US budget deal which, if passed by Congress, would avert a shutdown crisis such as the one that paralysed Washington in October.
Elsewhere, official data Thursday showed eurozone industrial output fell sharply in October, the latest sign that a fragile recovery from recession is struggling to gain traction.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.