LONDON, April 18: European stock markets dropped on Wednesday as the euro and sterling raced to multi-year highs against the dollar, sparking concerns for companies with exposure in the United States, dealers said.

The euro leapt past $1.36 for the first time since December 2004 and sterling, or the pound, hit its highest level against the US currency for almost 26 years.

A weak dollar is widely perceived as hurting European exporters because their goods become more expensive for importers paying with the US unit, analysts said.

Metal and mining companies also took a big hit on Wednesday because a large part of their earnings are in US dollars.

Wall Street had finished mostly higher on Tuesday as the main blue-chip index flirted with an all-time record high and shares were buoyed by upbeat earnings news and hints that inflation may be easing.

In London, mining company Vedanta Resources saw its share price slide 1.60 per cent to 1,414 pence.

In Paris, shares in global steel titan Arcelor Mittal dived 1.94 per cent to 38.93 euros, and in Frankfurt, German peer Thyssenkrupp sank 1.53 per cent to 38.61 euros.

On Wall Street on Tuesday, the Dow Jones Industrial Average climbed 0.41pc to 12,773.20 points at the closing bell.

The Nasdaq composite index, meanwhile, fell 0.05 per cent to 2,516.95 points.

The broad-market Standard and Poor's 500 index edged up 0.20 per cent to 1,471.48, reaching its highest level since September 2000.—AFP