By Sara Sjolin and Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stock markets fell on Monday,
as last Friday's huge rally, so far, has failed to carry over into
this week's start.
The Stoxx Europe 600 index lost 0.5% to end at 317.01, after
ringing up a 2.8% rally on Friday. The Friday rally came after a
wider selloff in European markets throughout the week, where the
pan-European index logged its longest losing streak in more than a
decade.
German stocks were among the hardest hit indexes in last week's
market rout, dropping to the lowest level in a year. On Monday, the
DAX 30 index suffered another beating, closing down 1.5% at
8,717.76,
As officials at the European Central Bank continue to debate
further stimulus measures, the eurozone economy "continues to be
the main drag on global growth and until it shows some signs of
life, risk-aversion flows are likely to continue to roil markets
into the year end," said Boris Schlossberg, managing director of FX
strategy at BK Asset Management, in a note.
Purchasing managers indexes in Europe will be released on
Thursday, "and markets will be keen to see some signs of
stabilization in demand which has been trending lower for the past
quarter," said Schlossberg.
As part of a previously outlined stimulus program, the ECB on
Monday said it's started buying short-dated covered bonds from
different countries, in sizes up to 25 million euros ($32
million).
Market action: Shares of SAP SE weighed on the German index,
losing 5.8% after the software provider lowered its earnings
outlook for this year.
Elsewhere in Europe, France's CAC 40 index fell 1% to 3,991.24,
while the U.K.'s FTSE 100 index dropped 0.7%.
Shares of Royal Philips NV lost 3.7% as the Dutch tech company
swung to a quarterly net loss because of a production suspension at
one of its health care plants and a legal provision of 366 million
euros ($467 million). (Read more about European stock movers
http://www.marketwatch.com/story/sap-slides-nutreco-surges-europes-big-stock-movers-2014-10-20.).
Italy's FTSE MIB had been higher earlier after data showed
Italian industrial orders rose in August, the first increase in
four months. But the index succumbed to selling pressure and fell
0.9% to 18,540.10.
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