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European stocks weaken as traders await Chinese data

A trader works in front of a board displaying the DAX index in Germany in 2011. Europe's main stock markets fell as dealers awaited key Chinese economic data and mulled eurozone crisis fears but scandal-hit bank Standard Chartered rebounded after heavy losses.

Europe's main stock markets fell Wednesday as dealers awaited key Chinese economic data and mulled eurozone crisis fears but scandal-hit bank Standard Chartered rebounded after heavy losses.

Markets sagged as traders looked ahead to Thursday's Chinese data including inflation and industrial production.

Sentiment was also hit overnight after Standard & Poor's cut Greece's debt rating outlook to negative.

In late morning deals, London's benchmark FTSE 100 index of top companies dropped 0.39 percent to 5,818.32 points as British investors awaited the latest economic growth and inflation forecasts from the Bank of England.

Frankfurt's DAX 30 slid 0.30 percent to 6,946.08 points and in Paris the CAC 40 reversed 0.29 percent to 3,442.72. Madrid shed 1.61 percent and Milan lost 0.55 percent.

In foreign exchange trade, the European single currency dipped to $1.2373 from $1.2401 late in New York on Tuesday.

"Traders seem largely content to sit on their hands right now, at least until we see that array of data ... from China," said GFT Markets analyst Fawad Razaqzada.

"The reality is that the problems in Europe haven't gone away -- ING (bank) has taken a big hit on Spanish exposure in today's results - so unless we see more really decent fundamentals coming out of the US and Asia, then it's going to be hugely difficult to justify much more on the upside."

Dutch banking giant ING on Wednesday said its second quarter net profit slumped 22.3 percent year-on-year to 1.17 billion euros ($1.45 billion), as it took a large hit on its exposure to debt-plagued Spain.

The results for the three months to June were slightly below analyst forecasts for 1.23 billion euros as polled by Dow Jones Newswires.

ING took a loss of 178 million euros on the sale of risk assets, mainly its holdings of Spanish government bonds.

In reaction, ING's share price slid 1.46 percent to 5.669 euros on the Amsterdam stock market, which was 0.86 percent lower.

Overnight, Standard & Poor's cut Greece's debt rating outlook to negative, saying the worsening economy and political challenges could soon force another downgrade.

"In Europe, the debt crisis appears to be rumbling along with still no end in sight with ratings agency S&P reducing Greece to a negative outlook last night on the basis that the country is likely to need additional financing this year," said Michael Hewson, analyst at CMC Markets trading group.

Standard Chartered shares meanwhile rebounded Wednesday, recouping some of the previous day's losses after New York state regulators accused it of hiding $250 billion in transactions with Iranian banks.

The British lender -- which focuses on Asia, the Middle East and Africa -- has denied the allegations.

The bank's share price rallied 6.12 percent to 1,303.69 pence, having slumped by almost 17 percent on Tuesday.

Rio Tinto shares rose 2.19 percent to 3,199 pence after the miner revealed that underlying earnings slipped 34 percent to US$5.2 billion in the first half of the year. However, the result beat market expectations.

Asian stock markets mostly closed higher Wednesday amid hopes fornew rounds of stimulus from the US and European central banks.

Tokyo added 0.88 percent, Seoul put on 0.87 percent, Shanghai climbed 0.16 percent and Sydney gained 0.49 percent. However, Hong Kong was flat before the raft of Chinese data.