European stocks mixed, London hit by poor data

LONDON: European stock markets diverged narrowly Tuesday, with London dented slightly by profit-taking and poor economic data, while traders kept a keen eye on developments in Japan and Libya.

The British capital's benchmark FTSE 100 index eased 0.11 percent to 5,779.72 points in midday trade, and Frankfurt's DAX 30 fell 0.19 percent to

6,803.32.

In Paris, the CAC 40 rose 0.20 percent to 3,912.20, and the Stoxx 50 index of leading eurozone companies won 0.30 percent to 2,869.42 points.

"As the morning progressed we have started to see some investors bank profits, and this has forced the FTSE and DAX into negative territory on the day," said City Index analyst Joshua Raymond.

"However, its too early to tell whether this is the start of a broader move by investors to bank profits."

European equities had risen on Monday, supported by UN-backed military action in Libya, easing nuclear fears in Japan plus merger and acquisition (M&A) activity in the telecoms sector.

"Trading floor sentiment still remains cautious as the Libyan military campaign and intermittent interruptions to the work on the Japanese nuclear reactors continue to unsettle the markets," added IG Index trader Will Hedden.

In London, downbeat data set a disappointing tone on the eve of the British government's annual budget.

British state borrowing rocketed last month to a record level, official data showed Tuesday, reaching £11.8 billion (13.6 billion euros, $19.3 billion) in February -- the highest-ever level for the month.

At the same time, British annual inflation jumped to 4.4 percent in February, the highest level for more than two years, according to separate data.

"February's public finances and consumer prices numbers presented a distinctly unfavourable backdrop to tomorrow's budget," noted Capital Economics analyst Jonathan Loynes.

Asian shares were mostly higher on Tuesday, with Tokyo soaring more than four percent, amid cautious optimism that Japan's nuclear crisis could soon be under control.

Japanese traders returned after Monday's public holiday to send the Nikkei shooting 4.36 percent higher, with the mood helped after the Bank of Japan pumped two trillion yen ($24.67 billion) into the money market.

The latest move means the central bank has injected 39 trillion yen to ease concerns about the ability of financial institutions to meet demand for funds. Wall Street brushed aside turmoil in the Middle East and Japan's nuclear troubles to rack up strong gains Monday, with AT&T's mega-deal to buy T-Mobile driving trader optimism.

Over the weekend, mobile phone giant Deutsche Telekom announced the sale of its T-Mobile USA division to US telecoms giant AT&T for $39 billion (27.5) billion euros).