LONDON: European equities fell on Wednesday despite a raft of largely positive company results, with trading volumes boosted by the resumption of activity in storm-struck New York.
London's FTSE 100 index of top companies dropped 1.15 percent to 5,782.7 points, while in Frankfurt the DAX 30 slid 0.33 percent to 7,260.63 points, and in Paris the CAC 40 gave up 0.87 percent to 3,429.27 points.
US stock markets dropped after returning from a historic two-day closure forced by superstorm Sandy, which completely shut down the US financial capital of New York.
Even though much of the city was still suffering the effects of power outages, flooding and wind damage, trading was smooth on the New York Stock Exchange and the tech-rich Nasdaq exchange, which were running on backup generators.
"After a positive morning session European markets have started to slide back in the afternoon session as the early morning optimism evaporated with the return of US markets to the fray after a two day weather induced absence," said Michael Hewson, Senior Market Analyst at CMC Markets UK.
"Whatever the reasons for this afternoon's sell off, whether it renewed concerns about Greece's debt sustainability ... or a reaction to the return of US markets, the fact remains that despite some fairly good company earnings reports, the outlook on an economic growth basis in Europe remains on a downward track," he added.
European officials denied Wednesday that a deal had been reached that would see Greece receive bailout funds needed to stave off bankruptcy next month, while Athens released even worse growth and debt forecasts as part of its 2013 budget.
Unemployment in the 17-nation eurozone hit also hit a new all-time high of 11.6 percent in September.
Nevertheless Spain's and Italy's 10-year bond yields, a sign of stress in the eurozone, continued their downward slide.
The rate of return for investors on Spanish 10-year bonds dropped to 5.616 percent from 5.670 percent on Tuesday.
The yield on 10-year Italian bonds slid to 4.960 percent from 4.994 percent.
Strong corporate earnings had provided the markets with an early boost.
The French oil group Total said that adjusted third-quarter net profit -- excluding changes in inventory values -- spiked 20 percent to 3.348 billion euros, boosted by high oil prices and improved refining margins in Europe.
Total shares nonetheless closed down 0.44 percent to 38.82 euros, after spending most of the day up.
Shares in the world's top steelmaker ArcelorMittal fell 6.43 percent to 11.43 euros after the group reported a plunge into third-quarter loss and cut its dividend owing to weak demand in China and Europe.
GDF Suez posted a 5.8-percent hike in its earnings before interest, taxes, depreciation and amortization for the first nine months of the year.
After gaining nearly two percent during the session, the company's shares ended down 0.03 percent at 17.71 euros.
Europe's airline sector also lit up traders' radar screens, with Air France-KLM and Lufthansa posting better-than-expected results for the third quarter. Their shares increased by 8.37 percent and 7.33 percent respectively.
In London, Barclays bank shares sank 4.73 percent to 227.5 pence after announcing that it fell into a nine-month net loss because of huge accounting charges.
The lender also revealed that it faced two new investigations in the United States, adding to a string of probes that have hit the bank's reputation.
-- Yuan hits another record high against dollar --
In Asia, shares had rebounded earlier in the day from losses suffered on Tuesday, as dealers welcomed the Bank of Japan's latest 11 trillion yen ($138 billion) stimulus plan.
Hong Kong stocks rallied 1.0 percent, Tokyo rose 0.98 percent, Sydney gained 0.70 percent and Seoul was 0.66 percent higher. Shanghai closed up 0.32 percent.
Attention has now turned to the release of Chinese manufacturing activity data on Thursday and US non-farm payrolls figures on Friday.
In foreign exchange deals, the euro drifted upwards to $1.2966 from $1.2959 late in New York on Tuesday. Gold prices increased to $1,719 an ounce from $1,710 an ounce on the London Bullion Market.
The yuan -- which trades in a tightly-controlled band -- ended at 6.2372 to the dollar on Wednesday, marking the strongest finish since 1994, when the country launched its modern foreign exchange market.
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