Investing.com - European stocks were sharply lower on Thursday, as the release of disappointing economic reports from Germany, France and China weighed on market sentiment.
During European morning trade, the EURO STOXX 50 tumbled 1.01%, France’s CAC 40 retreated 0.80%, while Germany’s DAX 30 plummeted 1.32%.
Market research group Markit said that its preliminary German manufacturing purchasing managers’ index fell to a two-month low of 54.7 in February from a final reading of 56.5 in January. Analysts had expected the index to inch down to 56.3 this month.
Meanwhile, the preliminary services PMI increased to a seasonally adjusted 55.4 this month from a reading of 53.1 in January. Analysts had expected the index to ease up to 53.4.
In France, the manufacturing PMI inched down to 48.5 this month from a reading of 49.3 in January. Analysts had expected the index to rise to 49.6 this month.
Meanwhile, the preliminary services PMI fell to 46.9 in February from 48.9 in January and below expectations for an increase to 49.4.
Market sentiment weakened earlier after data showed that the preliminary reading of China’s HSBC manufacturing index fell to a seven month low of 48.3 this month, down from 49.5 in January, remaining below the 50 level that separates expansion from contraction for a second month.
Financial stocks were broadly lower, as French lenders BNP Paribas and Societe Generale tumbled 1.64% and 1.52%, while Germany's Deutsche Bank lost 1.49%.
Among peripheral lenders, Italy's Unicredit and Intesa Sanpaolo dropped 1.74% and 1.91% respectively, while Spanish banks Banco Santander and BBVA plummeted 1.12% and 1.13%.
Elsewhere, Danone added 0.24%, even as the yogurt maker predicted a weak start to 2014 after reporting the first annual earnings decline in more than a decade after a botulism scare hurt baby-food sales in Asia.
Air France-KLM was up 0.17% after saying an earnings recovery driven by cost cuts under new Chief Executive Officer Alexandre de Juniac is picking up speed. The group also reiterated a plan to increase profit this year and further reduce debt.
In London, FTSE 100 retreated 0.57%, as U.K. lenders tracked their European counterparts lower.
Shares in Lloyds Banking declined 0.54% and Barclays lost 0.87%, while HSBC Holdings and the Royal Bank of Scotland plummeted 1.25% and 1.64%.
Mining stocks were also sharply lower, as Glencore Xstrata tumbled 1.23% and Fresillo plunged 3.13%, while Vedanta Resources dove 7.23%.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.20% fall, S&P 500 futures signaled a 0.17% loss, while the Nasdaq 100 futures indicated a 0.14% slip.
Later in the day, the euro zone was to publish closely watched data on manufacturing and service sector activity.
The U.S. was to release the weekly report on initial jobless claims and data on consumer price inflation, as well as a report on manufacturing activity in the Philadelphia region.