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European stocks decline after German PMIs; Dax down 0.57%

Stock MarketsSep 23, 2014 03:33AM ET
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European stocks open lower as E.Z. concerns weigh - European stocks were lower on Tuesday, despite the release of positive Chinese manufacturing data as a disappointing report from Germany weighed.

During European morning trade, the DJ Euro Stoxx 50 slid 0.49%, France’s CAC 40 retreated 0.83%, while Germany’s DAX dropped 0.57%.

Data earlier showed that the HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose to 50.5 this month, from a reading of 50.2 in August, confounding expectations for a fall to 50.0.

Separately, Markit reported that the preliminary German manufacturing PMI declined to a 15 month low of 50.3 from 51.4 in August. Economists had expected the index to tick down to 51.2.

The country’s services PMI improved to a two month high of 55.4 from 54.9 in August, and ahead of forecasts of 54.6.

On Monday, European Central Bank President Mario Draghi reiterated that the bank was prepared to ease monetary policy further should it become necessary to further address risks of a too prolonged period of low inflation in the euro area.

Draghi also warned that economic activity in the euro area has slowed and there's a risk of a further downturn.

Financial stocks were broadly lower, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) retreated 0.78% and 0.83%, while Germany's Deutsche Bank (XETRA:DBKGn) slipped 0.11%.

Among peripheral lenders, Italy's Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) dropped 0.71% and 1.12% respectively, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) declined 0.57% and 0.83%.

Elsewhere, Michelin (PARIS:MICP) tumbled 1.41% after the tiremaker said that its 2014 target for 3% growth in sales volume has become harder to reach in the current market conditions.

Rexel (PARIS:RXL) added to losses, down 2.99% after Ray Investment sold 20.9 million shares of the French electrical supplies distributor for €15.35 each.

In London, FTSE 100 retreated 0.71%, weighed by Tesco (LONDON:TSCO), whose shares plummeted 2.06% after the supermarket chain said Alan Stewart will join the board as chief financial officer on Tuesday.

The company's stock dove 12% on Monday when it announced the suspension of four executives after discovering that profit estimates had been overstated by £250 million for the first half of the year.

Financial stocks were also on the downside, as HSBC Holdings (LONDON:HSBA) lost 0.44% and Barclays (LONDON:BARC) dropped 0.48%, while Lloyds Banking (LONDON:LLOY) slumped 0.83%. The Royal Bank of Scotland (LONDON:RBS) overperformed however, with shares up 0.08%.

In the mining sector, stocks were broadly higher. Shares in Vedanta Resources (LONDON:VED) edged up 0.10% and Glencore Xstrata (LONDON:GLEN) added 0.15%, while rivals Rio Tinto (LONDON:RIO) and Bhp Billiton (LONDON:BLT) gained 0.72% and 0.91% respectively.

In the U.S., equity markets pointed to a lower open. The Dow 30 futures pointed to a 0.10% fall, S&P 500 futures signaled a 0.12% loss, while the NASDAQ 100 futures indicated a 0.18% decline.

Later in the day, the euro zone was to release what would be closely watched data on private sector activity.

European stocks decline after German PMIs; Dax down 0.57%

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