European stocks dip before US data

European equity markets slid Friday in cautious deals before vital US data, while airlines flew into turbulence on concerns over the impact of a bird flu outbreak in Asia, dealers said. In late morning trade, London's FTSE 100 index of top companies sank 1.02 percent at 6,279.62 points, Frankfurt's DAX 30 shed 1.26 percent to 7,718.84 points and in Paris the CAC 40 lost 0.86 percent to 3,693.98. "Stocks have again edged lower this morning as investors continue to reduce risk, with concerns over the consistently weak macro backdrop taking the edge off equity market confidence," said Matt Basi, head of UK Sales Trading at CMC Markets UK. "With the US having led the way in terms of recovery data so far this year, disappointing employment numbers so far this week have given way to concerns over today's (US) non-farm payrolls report, scheduled for release at 1330 (1230 GMT)." Meanwhile, European airline stocks dived Friday on rising fears among investors of the impact of a news strain of bird flu that has already killed six people in China. Air-France KLM shares were down 5.75 percent to 6.87 euros on the Paris stock exchange, while Lufthansa was off 3.69 percent to 14.37 euros in Frankfurt. In London, shares in IAG, which owns British Airways and Iberia, fell 4.64 percent to 240.6 pence, while low-cost carrier easyJet's share price showed a loss of 4.25 percent at 1,050.35 pence. "Concerns over bird flu could be a catalyst for these drops," said a Paris trader. The sector was also hit after easyJet forecast that it would halve its first-half pre-tax losses, but would remain in the red due the adverse impact of currency movements and changes in fuel prices. easyJet said in a trading update that pre-tax losses would stand at between £60 million and 65 million ($91-99 million, 71-77 million euros) for the six months to March 31. "Brokers have taken a mixed view of the numbers, which saw the budget carrier trim first half losses significantly, but voice concerns over the general state of the economy and its likely impact on demand in 2013," added Basi. "It's not been a good morning for European airlines in general, and British Airways parent IAG have joined them at the foot of the FTSE 100 performers list, down over 4.0 percent as concerns over an outbreak of Asian bird flu sparked speculation of a drop in travel demand in the short term." In foreign exchange activity on Friday, the euro eased to $1.2920 from $1.2934 late in New York on Thursday. On the London Bullion Market, gold prices rose to $1,555.08 per ounce from $1,546.50. In earlier deals on Friday, Hong Kong dived 2.73 percent in value to 21,726.90 points, with analysts saying traders were concerned about a number of bird flu deaths in mainland China, which rekindled memories of the SARS outbreak in 2003. Most Asian markets also fell on concerns over the US economy, but Tokyo enjoyed a second straight rally and the yen slipped after the Bank of Japan (BoJ) unveiled a vast plan to boost the economy. The Nikkei index surged more than four percent in early trade to its highest level since August 2008, a day after the BoJ's stimulus aimed at bringing years of deflation to an end. But profit-taking later in the day meant the rally dimmed, while the yen regained slightly after suffering a big sell-off in the wake of the bank announcement. The Nikkei won 1.58 percent to close at 12,833.63 points, which was its best close since September 1, 2008, weeks before the global financial crisis rocked markets. Other regional Asian markets struggled as jitters set in over the US economy and tensions on the Korean peninsula. Seoul closed down 1.64 percent, one day after falling 1.20 percent, while Shanghai and Taipei were closed for a public holiday.