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European markets slump on concern over U.S. fiscal cliff

Indexes hurt as Europe enters second recession in four years

European markets slump on concern over U.S. fiscal cliff

Milan, November 15 - Markets dropped across Europe on Thursday, paced by Milan's FTSE MIB index, as the 17-member euro zone entered a second recession over a time period of four years. Stocks were also hurt by concern U.S. tax hikes would impact economic growth in the world's largest economy. The International Monetary Fund on Thursday said the so-called U.S. ''fiscal cliff'' measures, or the cuts in spending and tax hikes planned for the end of the year in the world's largest economy, could have global consequences. Newly re-elected president Barack Obama on Friday starts negotiations with Congress leaders on the planned measures. Italy's Ftse Mib index fell 0.6% to 15,162 points. The eurozone economy fell back into recession after Eurostat said Thursday that the area posted negative growth for the second consecutive quarter in the July-September period of this year. The economies of the 17 nations that share the single currency contracted as the governments passed austerity measures aimed at curbing public spending and tackling towering debt. Gross domestic product fell 0.1 percent in the third quarter, after declining 0.2 percent decline in the previous three months. The Italian economy also posted a recession in the third quarter, according to data released on Thursday by national statistics institute Istat, but the decline in the nation's GDP slowed in the third quarter of this year. GDP dropped 0.2% between July and September compared to the second quarter and 2.4% on the same period in 2011. Some major European companies missed sales and profit estimates on Thursday. Zurich Insurance Group, Switzerland's biggest insurer, reported quarterly profit that missed analysts' estimates. Hennes & Mauritz AB, Europe's second-largest clothing retailer, said it missed some sales estimates in October. The yield spread between 10-year Italian bonds and the German benchmark a barometer of Italy's borrowing costs in the eurozone crisis, closed at 356 points with 10-year yields at 4.9%. The Frankfurt Dax bourse closed down at 7,043 , while the Paris Cac 40 Index fell 0.5% to 3,382 points. London's Ftse-100 stock market fell 0.8% to 5,677 points. Madrid's Ibex index bucked the trend, closing up 0.3% to 5,677 points.

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