European shares and euro slide on debt woes

European stock markets sank on Wednesday and the euro sat near one-year dollar lows on concerns about the eurozone, and after the US Federal Reserve decided against new economy-boosting plans. In morning deals, London's FTSE 100 index slid 0.74 percent to 5,449.53 points, Frankfurt's DAX 30 dipped 0.94 percent to 5,719.77 points and the Paris CAC 40 dived 1.28 percent to 3,039.35. The euro meanwhile tumbled as low as $1.3005 -- the lowest point since January 12. It later stood at $1.3051, from $1.3033 late in New York on Tuesday. "The slide in the single currency over the past 24 hours is surprising in so far that it has taken so long to come about," said CMC Markets analyst Michael Hewson. "Against a backdrop of concerns about ratings downgrades, a lack of large scale European Central Bank intervention, and Angela Merkel's reiteration that there would be no increase in the new bailout fund, it was news out of the United States that really helped push things along." Asian markets also fell on Wednesday, with traders unconvinced by Europe's deal to save its currency and downbeat over the US Fed's lack of fresh stimulus plans. Adding to the poor sentiment was German Chancellor Angela Merkel's opposition to raising the limit for Europe's bailout fund, highlighting cracks in the region's leadership. Hong Kong dropped 0.50 percent, Tokyo fell 0.39 percent and Shanghai slid 0.89 percent on concerns over last week's European debt deal and disappointment at the Fed's decision not to announce any new stimulus measures. Adding to the downbeat sentiment was news that Chinese leaders agreed to maintain a "prudent monetary policy" and "guarantee steady growth" in 2012. Investors have grown increasingly nervous about the outcome of an EU summit on Friday which agreed tighter fiscal rules for the eurozone but which many feel might not go far enough. Meanwhile, the US Federal Reserve said on Tuesday it would hold interest rates for some time to come and that the world's top economy was growing at a moderate level, but warned of severe global headwinds. Despite its concerns over the world outlook it did not unveil any fresh stimulus measures to kickstart growth, disappointing investors who had hoped for even an indication of future plans. The Fed meeting "was a letdown for the many investors looking for any change in policies", said Avis Wang, strategist at IG Markets in Singapore. Wall Street turned lower, with the Dow Jones Industrial Average off 0.55 percent, the S&P 500 0.87 percent lower and the Nasdaq diving 1.26 percent. Investors were already nervous that last week's deal in the European Union, which aims to tighten budgetary rules and more closely integrate members, might not be enough to solve the region's sovereign debt crisis. Twenty-six of the European Union's 27 members backed the "fiscal compact" but Berlin's hopes for a treaty revision were dashed when Britain opted out, citing a lack of protection for the City of London financial centre. The euro slipped below $1.31 in New York on Tuesday for the first time since January and remained under intense pressure on Wednesday. Dealers are keeping an eye on Standard & Poor's, which is expected to pass judgement on last Friday's agreement this week after putting 15 of 17 euro-member states -- including France and Germany -- on downgrade warning. The agency last week announced the AAA status of the EU itself was under threat. Fitch Ratings predicted a "significant" economic downturn in Europe with the debt crisis likely to continue through 2012, while Moody's said the crisis remains in a "critical and volatile stage".