* Weak German Q2 data hits stocks
* Wall Street set for losses
* Market focus on Merkel/Sarkozy meeting
* Euro weaker against Swiss franc, dollar
By Jeremy Gaunt, European Investment Correspondent
LONDON, Aug 16 Stagnant growth in Europe's
powerhouse Germany knocked stocks lower on Tuesday and hit the
euro, fuelling investor fears that the global economy is slowing
more than expected.
Wall Street also looked set for losses at the open.
The German data sharpened market focus on Tuesday's meeting
in Paris between French President Nicolas Sarkozy and German
Chancellor Angela Merkel, with investors looking for any signs
of new measures to contain the spreading euro zone debt crisis.
Germany's gross domestic product expanded just 0.1 percent
in April-June from the previous quarter, missing forecasts for
0.5 percent and knocking regional growth figures below
"The global slowdown is gradually reaching Germany," said
Andreas Scheuerle, economist at Dekabank.
The data showed Germany grew more slowly than battered,
debt-ridden Spain, which expanded by 0.2 percent.
Germany's slowdown sent European stocks lower, dragging
world equities with them, and later figures showing the euro
zone as a whole grew a slower than expected 0.2 percent did
nothing to improve sentiment.
The FTSEurofirst 300 index was down 1.4 percent and
MSCI's all-country world stock index lost half a percent.
Stocks had been rebounding somewhat from a battering that
last week took the MSCI index down as much as 20 percent from a
three-year high in May.
The U.S. S&P 500 index gained 2.18 percent on Monday.
Japan's Nikkei closed up 0.23 percent on Tuesday.
The euro was down, extending losses after the German data.
It fell 1 percent against the Swiss franc at 1.1219 francs
and half a percent against the dollar at
The franc has been a key safe haven for investors during
recent market turmoil.
Gold , the other major risk-off choice and one of the
best performing assets this year, was up around 0.6 percent at
$1,775 an ounce.
German government bond prices firmed after the growth data.
Investors were meanwhile hoping the Franco-German meeting
later in the day would come up with ways to improve euro zone
Talk of common euro zone bonds -- increasingly seen as a
powerful tool against the region's debt hurdles -- in some of
the German media in recent days has lifted hopes, but both
countries said euro bonds were not on Tuesday's agenda.
(Additional reporting by Marius Zaharia; Editing by John
Stonestreet and Ruth Pitchford)