EUROPEAN stock markets retreated on Wednesday as investors reacted to a flood of global economic data that highlighted weak growth worries as well as rising bond yields, traders said. London's FTSE 100 index of leading shares lost 1.99 per cent to 6,627.17 points, Frankfurt's DAX 30 index fell 1.70 percent to 8,336.58 points, and in Paris the CAC 40 dropped 1.89 per cent to 3,974.12 points. The Milan and Madrid stock exchanges slid 1.61 per cent and 0.82 per cent respectively. "In an almost complete reversal of yesterday's price action the bears have reasserted themselves today, overturning the brief return to optimism as European equity markets slide back sharply on the back of rising bond yields," said Michael Hewson, an analyst at CMC Markets UK. He said rising concerns that the US Fed could soon begin reducing its monetary stimulus plan has sent US bond yields to 12-month highs, and hiked fears of a possible correction in the markets. Rising Japanese bond yields has also caused concern that higher borrowing costs for companies could undo most of the benefit of a weaker yen, he added. "Economic data out of the eurozone... hasn't helped sentiment, with German unemployment rising," added Craig Erlam, a market analyst at traders Alpari. Sentiment was also hit by the IMF and the OECD lowering growth forecasts. The International Monetary Fund cut its 2013 growth forecast for China to "around 7.75 per cent" from 8.0 per cent, citing a sluggish global recovery which hurt exports. China is seen as a potential driver of global recovery in the face of the eurozone's ongoing debt crisis and unsteady growth elsewhere. Elsewhere, the OECD slashed its growth forecast for the world's most advanced economies, except Japan, but said growth should pick up later this year. In Europe, unemployment in Germany increased in seasonally adjusted terms in May, but the country's labour market is continuing to hold up relatively well to the eurozone debt crisis, official data showed. On the face of it, headline unemployment fell this month, but that was due to seasonal factors, monthly data compiled by the Federal Labour Office showed. The raw or unadjusted jobless total fell by 83,360 to 2.937 million and the jobless rate - which measures the number of unemployed as a proportion of the working population as a whole - fell to 6.8 per cent in May from 7.1 percent in April. In foreign exchange trading, the euro rose to $1.2890 from $1.2855 late in New York on Tuesday. The dollar fell to 101.74 yen from 102.32 yen on Tuesday. On the London Bullion Market, the price of gold climbed to $1,382.50 an ounce from $1,376.50 on Tuesday. Figures out Wednesday revealed that bank lending to the private sector in the eurozone contracted again in April as the region's long-running debt crisis continues to choke demand for credit. Eurozone bank loans to the private sector declined by 0.9 per cent in April compared with the same month in 2012 after already shrinking by 0.7 per cent the previous month, the European Central Bank said in a statement. Bank deposits also dropped in a possible reaction to the Cyprus bailout. Meanwhile the European Commission on Wednesday gave major economies France and Spain extra time to trim their deficits as it laid down economic targets for EU nations that desperately need growth and jobs in the fallout from the debt crisis. The Netherlands, Poland, Portugal and Slovenia should also be given extra time to cut their deficits, the Commission said, while recommending that Malta be placed under scrutiny and sharply criticising Belgium for failing to do enough to trim its deficit. US stocks slid on concerns linked to monetary policy and global growth. In midday trading the Dow Jones Industrial Average was down 0.88 per cent, the broad-based S&P 500 shed 0.77 per cent and the tech-rich Nasdaq Composite gave up 0.76 per cent. Asian shares ended mixed Wednesday after upbeat US economic data sent Wall Street soaring to a fresh all-time high on Tuesday. In Tokyo the Nikkei ended 0.10 percent higher, Seoul closed up 0.75 per cent and Shanghai finished with an increase of 0.12 per cent. Hong Kong, meanwhile, fell 1.61 per cent.