LONDON: Europe's main stock markets mostly fell on Monday despite gains in Asia on an easing of political tensions in Egypt as markets digested mixed economic data, especially signs of inflation pressures.
Traders said recent sustained gains left stocks vulnerable, with concerns over inflation emerging to provide a ready excuse to sell as investors consolidate positions.
London's FTSE 100 index of top shares fell 0.10 percent to 6,056.83 points in late morning trade, Frankfurt's DAX 30 rose 0.27 percent to 7,390.75 points and the Paris CAC 40 slipped 0.22 percent to 4,002.14.
The Stoxx 50 index of leading eurozone companies dropped 0.29 percent to 3,015.65 points approaching the half-way mark.
"Although Asia found support (from Egypt), Europe appears to be stumbling ... and traders are once again left weighing up the fact that equities have already come a long way and now the questions revolve around the management of creeping inflationary pressures," said IG Index trader Yusuf Heusen.
Egypt's new military rulers dismantled ousted strongman Hosni Mubarak's regime on Sunday, dissolving parliament, suspending the constitution and promising a referendum on political reform.
Traders also reacted to news that eurozone industrial output fell for the first time in three months in December, when harsh winter weather hit production in Germany and elsewhere.
Industrial production fell 0.1 percent from November but was 8.0 percent stronger than in December 2009, the European Union's Eurostat agency said Monday.
The December figures were slightly weaker than the market consensus estimate of flat output on the month and an 8.1 percent increase on the year in a Dow Jones Newswires survey of economists.
Earlier Monday, Asian markets closed higher thanks partly to the easing of Egypt's political crisis, although there was caution about upcoming Chinese inflation data while oil prices remained high, analysts said.
Tokyo's Nikkei climbed 1.13 percent to 10,725.54 points despite data showing Japan's economy contracted 1.1 percent in the last quarter of 2010.
The data confirmed Japan had lost its 42-year-old spot as the world's number two economy to China.
The market partly responded to a modest gain on Wall Street last Friday, when optimism about US economic prospects was compounded by relief at the resignation of Mubarak after weeks of unrest.
The Dow Jones Industrial Average rose 0.36 percent to finish at 12,273.26 points ahead of the weekend.
"At present, it doesn't appear as if we'll get much additional support from New York at the open with the Dow now pointing around five points lower, but after the big run-up we've seen since the end of January a phase of consolidation is arguably overdue," said trader Heusen.
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