European stock markets kick off week on downbeat note

Deflation is such a threat that the European Central Bank has moved into negative interest rates to get cash flowing.

London: Europe`s main stock markets traded mixed on Monday, as traders reacted to eurozone inflation numbers ahead of key US jobs data due later in the week.

London`s benchmark FTSE 100 index dipped 0.03 percent to stand at 6,755.43 points around midday in the British capital.

Frankfurt`s DAX 30 added 0.15 percent to 9,829.44 points while the CAC 40 in Paris slid 0.37 percent to 4,420.38 compared with Friday`s close.

The euro gained to $1.3663 from $1.3646 late on Friday in New York.

Inflation across the 18-nation eurozone was steady in June at 0.5 percent, but remained far below target against a background of concern about deflation, official data showed on Monday.

Deflation is such a threat that the European Central Bank has moved into negative interest rates to get cash flowing, and authorities are closely watching inflation rates in the hope that it will edge up towards the bank`s target of nearly 2.0 percent.

In foreign exchange, the British pound eased to $1.7021 from $1.7034 late on Friday. The euro gained to 80.25 British pence from 80.09 pence Friday.

On the London Bullion Market, the price of gold fell to $1,312.97 an ounce from $1,317.50 on Friday.

On the corporate side, shares in BNP dropped 0.44 percent to 49.2 euros. The French bank has agreed to pay US authorities a $8.9 billion fine to avoid being tried in court for dealing with US-blacklisted countries, sources close to the matter told AFP.

The deal ends months of haggling which saw French President Francois Hollande pressing his US counterpart Barack Obama to intervene and lighten the punishment.

Agreement on the record fine, approved by the bank`s board of directors at a special weekend meeting in Paris, is due to be announced Monday after markets close at the New York Stock Exchange around 4:00 pm .

Easyjet shares slumped 5.42 percent to 1,380 pence after a broker downgrade from Bank of America Merrill Lynch.

Asian stock markets ended mixed on Monday despite Friday`s positive lead from Wall Street, as traders await the release of key economic data this week including figures on global manufacturing and US jobs.

"The trading week in the US is going to be shortened as a result of the Independence Day bank holiday on Friday, which means we have a lot of data packed into only four days," noted Craig Erlam, market analyst at Alpari traders.

"Of the releases on Monday, the one that really stands out is the pending home sales release for May."

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