FXstreet.com (Barcelona) - European stock markets have turned to negative territory on the back Euro Area's GDP figures showing a deeper than expected recession in the 4Q. Euro has tumbled and Pound dropped lower.

Eurostoxx 50 Index goes through losses by 1.05% with German DAX Index 0.95% down, and French CAC Index 1.11% lower than the opening level. London FTSE Index drops 1.15% after a positive start.

Risk aversion has taken hold of the markets immediately after Eurostat released its Q4 final GDP estimation, which shows that Euro Zone economies shrunk, from October to December last year, at the fastest pace since data is taken in 1995. In the UK, manufacturing declined in February for the 12th consecutive month, although the declining pace seems to have moderated.

Euro tumbles on Euro Zone's recession

The Euro has been hit the most by risk aversion, after an initial attempt to pick up reaching levels at 1.3405, the pair has dropped all the way to 1.3250 support level, which, so far, remains intact.

The Pound's attempted to pick up from 1.4640 but upside move was has halted at 1.4745 and the Pound reversed dropping to levels below previous intra-day low at 1.4640, reaching right above 1.4600 at midday time in Europe.

USD/JPY has weakened further during the European session, rejection from 100.65 level has taken the dollar below 100.35 level to test 99.90, which so far remains in place.