LONDON - European stock markets fell in early dealing on Wednesday, a day after Wall Street was sent reeling by a strong inflation warning from the US Federal Reserve and a quarter-point rate rise, dealers said.
The London FTSE 100 index dropped 0.63 percent to 4,906.10 points, the Frankfurt DAX 30 lost 0.70 percent to 4,290.66 points and in Paris the CAC 40 shed 0.73 percent to 4,017.69.
The DJ Euro Stoxx 50 index of leading eurozone shares slipped 0.76 percent to 3,027.25 points.
The euro stood at 1.3033 dollars.
The warning from the Fed pushed US stocks lower as investors braced for a more "hawkish" stand on monetary policy from the US central bank.
The Dow Jones Industrial Average saw an early rally cut short, and skidded 0.90 percent to 10,470.51 points, while the Nasdaq tumbled 0.91 percent to close at 1,989.34 on Tuesday.
The market sold off after the Federal Open Market Committee (FOMC), in hiking the benchmark federal funds rate by 25 basis points to 2.75 percent, included language on inflation that was seen as worrisome to some.
In London trading, Morrison fell 0.62 percent to 200.5 pence after Britain's fourth-biggest grocer posted a 7.1-percent drop in pre-tax profits to 297.1 million pounds (428.2 million euros, 559.0 million dollars).
The group announced also the departure of its finance director after a year in which the group struggled to integrate the Safeway chain, which it bought last year for 3.2 billion pounds.
And in Paris, Alcatel dropped 1.66 percent to 9.49 euros, despite news that the French telecommunications equipment maker was granted a 17-million-euro deal by China Mobil, the country's largest mobile telecom operator, to expand mobile phone networks there.
In Frankfurt, shares in Lufthansa bucked the downward trend, rising 1.35 percent to 11.28 euros after shareholders in the troubled Swiss International Air Lines approved a merger deal with the German airline worth up to 310 million euros (409 million dollars).
In Asia meanwhile, Tokyo's benchmark Nikkei-225 index lost 0.87 percent to 11,739.12 points on Wednesday after the US Federal Reserve shook up Wall Street with a warning on inflation, dealers said. Hong Kong's key Hang Seng Index closed down 1.25 percent at 13,603.61 points.
03/23/2005 10:22 GMT