European stocks drop at open on Spanish bailout fears

Europe's main stock markets fell at the start of trading on Wednesday, with investor sentiment hit by ongoing speculation over a full bailout for debt-stricken Spain. London's benchmark FTSE 100 index of top companies slid 0.31 percent to 5,791.54 points, Frankfurt's DAX 30 shed 0.21 percent to 7,290.94 points and in Paris the CAC 40 dropped 0.55 percent to 3,395.50. Asian markets traded mixed on Wednesday with uncertainty over a bailout for struggling Spain keeping traders on edge. "European headline shares opened lower this morning as once again investors were sent mixed messages regarding policy maker's actions on the eurozone debt crisis," said Spreadex trader Shavaz Dhalla. The region's sovereign debt crisis continued to weigh after Spain's Prime Minister Mariano Rajoy said Tuesday that he was not planning any time soon to ask for a rescue package despite the parlous state of the country's finances and its dangerously high borrowing costs. "The Spanish prime minister yesterday halted reports that Spain was about to request a bailout, juxtaposing news reports indicating the contrary," added Dhalla. "Thus, the current pessimism within the markets probably reflects investors uncertainty as to who to believe regarding how close policy makers are to resolving the eurozone debt crisis." Spain, the eurozone's fourth biggest economy, is required to make a formal demand for help in order to trigger the release of eurozone rescue funds and supportive action from the European Central Bank. Analysts had expected it to formally ask for help within days after last week unveiling an austerity budget widely seen as a precursor to a request.