AFP/London

European stock markets closed down yesterday, as deflation worries deepened for the eurozone, which was locked in crucial talks with Greece over a possible restructuring of debt.
London’s benchmark FTSE 100 index ended the week down 0.90% at 6,749.40 points.
Frankfurt’s DAX 30 index shed 0.41% to 10,694.32 points, and in Paris the CAC 40 fell 0.59% to 4,604.25 points.
Eurozone consumer prices fell by a record 0.6% in January, confirming deflation could be taking hold for the long term, EU data showed.
The drop from minus 0.2% in December appears to back the European Central Bank’s decision last week to launch a bond-buying spree to drive up prices.
Plummeting world oil prices were largely to blame for the fall in the 19-country eurozone, already beset by weak economic growth and high unemployment, the EU’s data agency Eurostat said.
“Big news out of the eurozone... as falling energy prices continue to keep the economic storm clouds hovering,” said Daniel Sugarman, market strategist at ETX Capital trading group.
The minus 0.6 inflation rate matches the same record drop in prices the eurozone set in July 2009 at the worst of the global financial crisis.
Official data on Thursday showed that inflation in Germany, Europe’s biggest economy, dipped into negative territory in January for the first time in five years.
Investors were also watching with concern the eurozone’s negotiations with Greece, where the head of the Eurogroup Jeroen Dijsselbloem warned the anti-austerity government against reneging on reforms tied to a €240bn ($269bn) bailout.
The two sides appeared headed for a clash as eurozone member Portugal — which had doggedly carried out all the reforms required under its rescue programme — said it would not accept any debt renegotiation for Greece.
European markets did not get any support from across the Atlantic, where US stocks were mostly trading down.
The Dow Jones Industrial Average shed 0.18%, while the broad-based S&P 500 fell 0.30%.
The euro weakened to $1.1296 from $1.1317 late in New York on Thursday.
On the corporate front, shares in IAG, parent of British Airways and Spanish carrier Iberia, fell 3.46% to 544.50 pence after Qatar Airways said it had purchased almost 10% of the group.
The move represents something of a change for Qatar Airways, as its chief executive Akbar al-Baker has publicly criticised European carriers, saying earlier this month that they “cannot keep up” with competition from Gulf carriers.
IAG, meanwhile, is hoping to buy Irish airline Aer Lingus, which this week backed a €1.35bn ($1.53bn) takeover bid.