Investing.com - European stocks turned mostly lower on Monday, as downbeat economic reports from Germany fuelled concerns over the health of the euro zone's biggest economy and as concerns over tensions in Ukraine persisted.
During European early afternoon trade, the DJ Euro Stoxx 50 inched up 0.05%, France’s CAC 40 declined 0.32%, while Germany’s DAX slipped 0.18%.
European equities weakened after data on Monday confirmed that Germany’s economy contracted by 0.2% in the second quarter, in line with forecasts and unchanged from a preliminary estimate.
Separate reports showed that Germany’s manufacturing sector expanded at the slowest pace in 11 months in July, while factory activity in France contracted at the quickest pace in 13 months.
Slowing growth in the euro area could add to pressure on the European Central Bank to implement fresh measures to shore up the faltering recovery in the region, ahead of its upcoming monetary policy meeting on Thursday.
Meanwhile, investors continued to monitor the situation in Ukraine ahead of negotiations due to take place later in the day between Ukrainian and Russian officials and pro-Russian separatists after talks last week resulted in no major breakthrough.
Financial stocks remained broadly lower, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) tumbled 1.07% and 2%, while Germany's Deutsche Bank (XETRA:DBKGn) retreated 0.86%.
Among peripheral lenders, Italy's Unicredit (MILAN:CRDI) and Intesa Sanpaolo (MILAN:ISP) lost 1.44% and 1.90% respectively, while Spanish banks Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) declined 0.65% and 0.77%.
Elsewhere, Iliad (PARIS:ILD) saw shares plunge 4.10% amid reports the French provider of telecommunication services is currently in talks with private-equity firms to team up and make an improved offer for Deutsche Telekom (XETRA:DTEGn)'s T-Mobile US unit.
In London, FTSE 100 dipped 0.06%, still weighed by Tesco (LONDON:TSCO), whose shares plummeted 1.80% after Harris Associates, one of the supermarket group's biggest shareholders, said it had more than halved its stake in the business, saying it was operating an "incoherent strategy" with "unclear management direction".
Financial stocks also remained broadly lower, as Barclays (LONDON:BARC) dropped 0.57% and Lloyds Banking (LONDON:LLOY) retreated 0.83%, while HSBC Holdings (LONDON:HSBA) and the Royal Bank of Scotland Group (LONDON:RBS) tumbled 0.91% and 1.27% respectively.
In the mining sector, stocks were mixed. Shares in Rio Tinto (LONDON:RIO) climbed 0.53% and Fresnillo (LONDON:FRES) advanced 0.68%, while Glencore Xstrata (LONDON:GLEN) slipped 0.23% and Bhp Billiton (LONDON:BLT) slumped 0.39%.
In the U.S., markets were to remain closed for the Labor Day holiday.