European markets edge lower after big rally

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By PAN PYLAS, Associated Press

LONDON (AP) — European stock markets gave up some of their previous session's gains on Tuesday as the enthusiasm generated by upbeat U.S. economic figures had run its course.

A positive U.S. manufacturing survey from the Institute for Supply Management had helped stocks recover as Wall Street opened on Monday, pushing the Dow Jones industrial average, for example, up to its highest close since December 2007.

The buying momentum carried through into the Asian session but came to a halt as Europe's bourses opened.

With little on the calendar, trading is expected to remain fairly muted ahead of the next batch of U.S. economic news later, including the publication of the minutes to the last rate-setting meeting of the Federal Reserve. Last week, stocks rallied in the aftermath of an indication from Fed chief Ben Bernanke that the central bank will retain its super-loose monetary policy for a while.

"Caution now persists as we wait for today's economic data, which is concentrated in the U.S.," said Ben Critchley, a sales trader at IG Index. "As well as factory orders for February, the latest set of Fed minutes will be released, and the bulls will be hoping that the wording of the meeting will reveal a continued accommodative stance."

In Europe, the FTSE 100 index of leading British shares was down 0.1 percent at 5,871 while the CAC-40 in France fell 0.1 percent to 3,458. Germany's DAX was flat at 7,058.

Wall Street was poised for a flat opening following Monday's stellar gains — both the Dow futures and the S&P 500 futures were 0.1 percent lower.

The U.S. will likely remain the main focus in the markets all week, though a long four-day Easter weekend in much of Europe, starting Friday, may limit the impact of monthly U.S. nonfarm payrolls data on that day. The payrolls figures often set the market tone for a week or two after their release.

Trading was equally subdued in the currency markets, with the euro up 0.2 percent at $1.3348.

Earlier, stocks in Asia mostly rallied on the back of the previous session's gains in Europe and the U.S.

Hong Kong's Hang Seng jumped 1.3 percent to 20,790.98, while South Korea's Kospi added 1 percent to 2,049.28. But Japan's Nikkei 225 index fell 0.6 percent to close at 10,050.39, as a strengthening yen threatened to cut into the profits of exporters that depend heavily on overseas sales. Mainland China markets are closed for public holidays.

Oil prices edged lower alongside equities, with the benchmark New York rate down 71 cents at $104.52 a barrel.

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Pamela Sampson in Bangkok contributed to this report.

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