European stock markets drop amid strikes

European stock markets slid on Wednesday as workers across indebted eurozone nations took part in coordinated general strikes in protest at their governments' deep austerity programmes. London's benchmark FTSE 100 index dropped 0.66 percent to 5,748.08 points approaching midday as traders reacted to mixed company earnings, a drop in British unemployment and a downgrade to the Bank of England's growth forecasts for Britain. Frankfurt's DAX 30 slipped 0.44 percent to 7,137.79 points and in Paris the CAC 40 lost 0.41 percent to 3,416.53. Madrid stocks slipped 0.12 percent and Milan shed 0.43 percent. Markets headed lower "as eurozone concerns continue to hit risk appetite," said Craig Erlam, market analyst at Alpari trading group. "Strikes against austerity in the southern eurozone states are starting to gather large support, raising concerns about how much more the countries can take." In foreign exchange deals, the euro rose to $1.2739 from $1.2703 late in New York on Tuesday. On Tuesday, the European single currency had hit two-month low points against the dollar. Gold prices dipped to $1,725.53 an ounce in trading on the London Bullion Market on Wednesday, compared with $1,726.25 on Tuesday. Baton-wielding riot police and demonstrators clashed in central Madrid on Wednesday as Spain held a general strike as part of a Europe-wide anti-austerity protest. Spain and Portugal held the first coordinated general strike in the Iberian Peninsula, slashing train, bus and metro services, halting factories and cancelling more than 700 flights. They were backed by temporary walkouts in Italy, the number-three eurozone economy, and Greece, which is fighting to avert default despite agreeing 13.5 billion euros ($17 billion) in cuts and tax increases. Markets were suffering losses also on worries about the US economic outlook following last week's re-election of President Barack Obama. Dealers fear a stand-off in Congress in addressing the fiscal cliff of tax hikes and spending cuts that are due to come into force on January 1 unless a deal is brokered ahead of the new year. The package, drawn up during fraught spending cap talks last year, could tip the world's biggest economy back into recession. Adding to the selling pressure is uncertainty over Greece after European finance chiefs put off for a week a decision on granting Athens the latest instalment of a multi-billion-euro bailout. And in Germany a survey on Tuesday showed investor confidence had worsened in November as the eurozone crisis began to drag on its biggest economy. However, there was some good news for Greece with the threat of a default this week receding after it raised 4.0 billion euros in short-term bond auctions, which should help plug a financing gap left by the stalled loan. On the corporate front on Wednesday, shares in RWE, Germany's second biggest power supplier, fell 0.35 percent to 32.815 euros, despite the company expressing confidence about this year's earnings after posting solid quarterly profits. In London, Britain's biggest insurer Prudential rose 0.54 percent to 870 pence after the company said its sales rebounded sharply in the third quarter, boosted by growth in Asia.