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Europe's markets hit by Iraq fears

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LONDON, England (CNN) -- Uncertainty and war fears ruled European bourses in midday trading on Friday.

London's FTSE 100 rebounded from earlier losses, rising 0.5 percent to 3,617.1.

Frankfurt's electronically traded Xetra Dax was little changed at 2,648.46 and the CAC 40 blue chip index in Paris slipped a tenth of a percentage point lower to 2,832.56

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 0.1 percent, with the mining, information technology, and telecom stocks offsetting losses from the media, insurance and auto sub-sectors.

Global political concerns continue to plague investor sentiment as chief United Nations inspectors Hans Blix and Mohamed ElBaradei head to Baghdad this weekend. They are due to report to the Security Council on February 14.

• Interactive: Council on Iraq
• Latest: Iraq Tracker
• Explainer: Al Samoud
• Special Report: Showdown Iraq

U.S. President George W. Bush increased the pressure on Iraq on Thursday, telling Saddam Hussein "the game is over." (Full story)

"Market nerves are ragged,'' Anais Faraj, global strategist at Nomura, told Reuters. "Its like Chinese water torture. We thought we'd have resolution from Blix, then we thought (U.S. Secretary of State Colin) Powell was going to give the definitive statement and now its dragging on until next Friday.''

On the corporate front, Germany's biggest bank Deutsche Bank (FDTE) recouped some of its losses but was still down 0.8 percent to 38.30 euros after posting a fourth-quarter loss. Its pretax profit was also below expectations. (Full story)

Vivendi Universal (PEX), Europe's biggest media company, dropped 2.6 percent to 14.28 euros after Chief Executive Jean-Rene Fourtou fired the boss of the company's pay television business, ruled out its sale and scrapped a planed flotation. (Full story)

And Britain's GlaxoSmithKline (GSK) extended the previous session's losses, sliding 2.3 percent to 1,096 pence on continued concerns about challenges to two of its drugs. U.S. investment bank Bear Stearns said that one or more unidentified generic firms had filed with U.S. regulators requests to sell copycat versions of drugs.

The AEX index in Amsterdam fell 0.7 percent and Milan's MIB30 index rose 0.5 percent, while the SMI in Zurich little changed.

In the U.S. on Thursday, concerns about tensions in Iraq and North Korea and some weak economic data handed the Dow and S&P another day of losses.

The Dow Jones industrial average slipped 0.7 percent, or 55.88 points, to 7929.30, and the Standard & Poor's 500 index dipped 0.6 percent, or 5.44 points, to 838.15. The Nasdaq composite was virtually unchanged, up just 0.23 points to 1301.73.

Wall Street was expected to open little changed later on Friday. S&P 500 index futures edged up 1.7 points to 842.20 on the Globex trading system, while fair value, a measure that takes account of interest costs and dividend payments, was calculated at 837.37.

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