European stocks close in red as data disappoints

LONDON: European stock markets closed in the red Monday as traders reacted to a further drop in eurozone business activity that offset positive news for Chinese manufacturing, analysts said.
London’s FTSE 100 index of top companies lost 0.36 per cent to 6,800.56 points, while Frankfurt’s DAX 30 fell 0.66 per cent to 9,920.92 points and the CAC 40 in Paris slumped 0.57 per cent to 4,515.57 points compared with Friday’s closing levels.
The euro dipped to $1.3591 from $1.3597 late in New York on Friday.
“Stocks in Europe were weak from the offset today as any hopes of a bounce from positive Chinese data were soon undone by concerns over Iraq and missed expectations for European services and manufacturing data,” said Jasper Lawler, an analyst at CMC Markets.
Alastair McCaig, market analyst at IG traders said however that mining stocks have been in demand “thanks to the (Chinese) news, which has gone some way to leaving the FTSE as the relative outperformer.”
A decision by South African platinum mine workers’ union to end their protracted strike also lent support to mining stocks.
BHP Billiton won 1.92 per cent to 1,938 pence, Randgold Resources gained 1.83 per cent to 4,900 pence and Anglo American climbed 0.96 per cent to 1,470.50 pence.
Eurozone business activity slipped for the second month running in June, suggesting a modest recovery could be stalling, a closely watched survey showed on Monday.
Markit Economics said its Eurozone Composite Purchasing Managers Index (PMI) for June, a leading indicator of overall economic activity, slipped to 52.8 points from 53.5 in May, coming in at the weakest level since December.
The data showed that growth remained robust in Germany, despite weakening slightly, but that the downturn deepened in France, the country increasingly generating the most worry in the currency bloc.
In Paris, shares in power and rail group Alstom slumped 4.11 per cent to 26.85 euros, shedding early gains on a weekend deal for the French state to become a shareholder as US firm General Electric obtained the gas turbine division of the group.
But brokers Aurel BGC said that the formula agreed for the government to buy Alstom shares from conglomerate Bouygues at 35 euros per share or more was unnecessarily complex.
At Bank of America-Merrill Lynch, analysts said that the market might not like the deal for the state to acquire 20 per cent of Alstom.
Meanwhile: Wall Street was also down, with Dow Jones dipping 0.24 per cent and Nasdaq losing 0.13 per cent.
In Asia, stock markets ended mixed on Monday amid the positive Chinese manufacturing figures.
The early purchasing managers index (PMI) figures from banking giant HSBC added to an upbeat morning for the region, which was already in positive territory after another record close on Wall Street.
HSBC said early results showed its PMI of Chinese manufacturing came in at 50.8 this month, up from a final reading of 49.4 in May.
Anything above 50 indicates growth and anything below suggests contraction.
The latest figure is the first time the reading has come in above 50 since December’s 50.5, and will raise hopes that a slowdown in the world’s second biggest economy has bottomed out.
It also follows a recent spate of data indicating a pick-up in the Asian economic giant after the government introduced some measures to kickstart growth.
In foreign exchange deals on Monday, the British pound fell to $1.7007 from $1.7010 late on Friday.
The euro slipped to 79.91 pence from 79.93 pence.
On the London Bullion Market, the price of gold climbed to $1,313.50 an ounce from $1,312.50 Friday.