(MENAFN- AFP) Europe's stock markets were weak on Wednesday, weighed down by concerns that tougher sanctions against Russia could hurt the region's economy despite news of a sharp rebound in US economic growth.
In mid-afternoon deals, London's benchmark FTSE 100 index fell 0.18 percent to stand at 6,795.47 points, from Tuesday's closing levels.
In Paris, the CAC 40 fell back 0.13 percent to 4,359.85 points and Frankfurt's DAX 30 index inched up 0.09 percent to 9,662.54.
The US and European Union agreed to expand restrictions against Moscow late on Tuesday, targeting the Russian energy, defence, and finance sectors.
"Both the Russian sanctions (and the potential headwind to Europe) and Argentina debt situation" are spooking investors, said Chris Weston at trading firm IG.
US markets were buoyed by news the economy rebounded in the second quarter to a peppy 4.0 percent growth, while the first quarter's sharp contraction was less than previously thought at 2.1 percent.
Job growth in the US economy, the world's biggest, also held above 200,000 for the fourth straight month, payrolls company ADP said, beating analyst estimates.
"Combined with accelerating payrolls gains and rapidly falling unemployment, the US picture is one of solid underlying momentum," said Robert Wood, an economist with Berenberg.
"That should mean a first rate hike no later than April next year."
Five minutes into trading, the Dow Jones Industrial Average 0.36 percent to 16,973.22.
The broad-based S&P 500 rose 0.40 percent to 1,977.86, while the tech-rich Nasdaq Composite Index jumped 0.64 percent to 4,470.99.
- Barclays surges -
In London, the focus was on upbeat results from Britain's scandal-hit bank Barclays.
Barclays' share price jumped 3.9 percent after the bank posted a 68-percent jump in first-half net profits, as it continued to shrink its investment bank division.
Earnings after taxation surged to £1.13 billion ($1.9 billion, 1.4 billion euros) in the six months to June, from £671 million a year earlier.
Airbus shares climed 4.2 percent after the defence group posted a stellar performance in the first half of the year, raising net profits by half with sales of airliners and confirming its full-year outlook.
In Madrid, shares in Spain's second-biggest bank by market capitalisation, BBVA, rose 1.34 after its first-half profits more than halved from a year ago, dragged down by lower earnings in its South American units.
- Euro sinks -
The European single currency meanwhile slid to $1.3370 - the lowest level since mid-November. It later recovered to $1.3383, down from $1.3409 in New York on Tuesday.
Capital Economics economist Jonathan Loynes predicted the euro could fall to $1.30 by the end of this year and to $1.25 by the end of 2015 as the eurozone recovery remains weak compared to the US.
News that Germany's inflation fell to the lowest level for more than four years this month could also fuel expectations the European Central Bank may take new easing measures to stop the eurozone sinking into deflation.
Official figures also showed business and consumer confidence in the economic outlook for the eurozone was little changed in July, suggesting a modest recovery may be near peaking out.
"The euro finally appears to be succumbing to the downward pressure implied by the divergent prospects for monetary policy in the US and eurozone," Loynes said.
In Asia, markets mostly rose on Wednesday as investors awaited the Fed decision and US data, with Tokyo rising 0.18 percent to strike a six-month high at 15,646.23 points.
The Japanese market has enjoyed a pick-up in recent weeks thanks to a dip in the yen, which helps exporters, as well as upbeat corporate earnings.
Sydney added 0.62 percent, Seoul climbed 1.00 percent and Hong Kong rose 0.37 percent, but Shanghai ended marginally lower.
On the foreign exchange market, the euro rose to 79.12 British pence from 79.13 on Tuesday. The pound decreased to $1.6913 from $1.6943.
The price of gold eased to $1,297.50 an ounce on the London Bullion Market from $1,299.25 on Tuesday.
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