Markets muted after soft European growth figures

LONDON — A disappointing batch of economic growth figures out of Europe kept global stock markets in check Thursday as well as weighing on the euro.

Eurostat, the EU's statistics office, said the economy of the 18 countries that share the euro saw economic output grew by only 0.2 percent in the first quarter from the previous three-month period. The modest rise came despite a better-than-expected 0.8 percent advance in Germany.

Though that marked the fourth straight quarter of expansion following the recession, the rise was below economists' expectations — the consensus in the markets was for a 0.4 percent increase.

A large chunk of the blame for the underperformance can be placed on a flat performance in France, Europe's second largest economy behind Germany. Between them, the two make up roughly half of the eurozone economy.

"This is very disappointing just as we thought the area was heading in the right direction, instead we're seeing another setback," said Craig Erlam, market analyst at Alpari.

In Europe, Germany's DAX was flat at 9,751 while the CAC-40 in France fell 0.2 percent to 4,493. The FTSE 100 index of leading British shares was up 0.1 percent at 6,884.

The selling pressure on the euro continued after the figures as traders think the below-forecast growth figures makes it more likely that the European Central Bank will provide a fresh stimulus to the eurozone economy at its next policy meeting on June 5. The euro was down 0.4 percent at $1.3660.

Wall Street was poised for a subdued opening, with Dow futures and the broader S&P 500 futures down 0.1 percent.

Earlier in Asia, robust quarterly growth figure in Japan failed to boost sentiment. Investors reduced risky assets following a pullback in U.S. stocks from record levels.

Tokyo's Nikkei 225 stock index fell 0.8 percent to 14,298.21 despite the government reporting that the economy expanded at an annualized 5.9 percent in the first quarter, the fastest pace in nearly three years.

The growth was attributed to consumers and companies bringing forward spending ahead of a sales tax hike on April 1. Economists say the tax increase could cause a contraction in the economy in the current quarter.

China's Shanghai Composite fell 1.1 percent to 2,024.97.

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