By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks dropped Monday, with the
pan-European benchmark slipping from its first weekly advance in
nearly a month as investors considered mixed regional economic
readings.
The Stoxx Europe 600 index declined 1.1% to 324.39,
relinquishing a portion of last week's gain of 1.8%, the first
weekly advance in nearly a month.
The composite purchasing managers' index for the euro zone from
market-research firm Markit came in at 53.2 for March, down
slightly from the previous month's reading of 53.3 but still
showing an expansion for the ninth straight month.
Weakness in the markets followed data overnight from HSBC that
its preliminary China manufacturing Purchasing Managers' Index for
March fell to an eight-month low, missing a consensus forecast and
showing further contraction in the sector. Asian stocks finished
higher as investors appeared to anticipate that Beijing will
introduce a series of policy measures to stabilize growth.
But in Europe, it "seems the markets are reacting more to the
negativity of numbers rather than the potential cash injection,"
said James Hughes, chief market analyst at Alpari Ltd. in London,
in a note Monday.
European stocks held to losses after Markit's initial PMI for
the U.S. fell to 55.5 from 57.1 in February, though the report
still showed improving conditions for manufacturers. On Wall
Street, the S&P 500 index (SPX) turned lower by roughly 1%.
In country-specific moves, Germany's DAX 30 index fell 1.7% to
9,188.77, with Markit's report that private-sector activity in
Germany unexpectedly slowed in March. Mail-delivery company
Deutsche Post AG rose 1.7%, the only one of the DAX's 30 components
to finish higher.
Deutsche Lufthansa AG shares declined 3% after pilots at the
airline on Friday voted to strike as part of a rift with the
carrier over pay.
France's CAC 40 index gave up 1.4% to 4,276.34, although
economic data brightened, with Markit saying France's
private-sector output in March expanded to a 31-month high. In
French local elections on Sunday, the far-right National Front
party made gains, in a sign of discontent with Socialist President
François Hollande.
The U.K.'s FTSE 100 index fell 0.6% to 6,520.39, as Vodafone
Group PLC pulled back by 2.2%. However, gainers included Lloyds
Banking Group , up 1.5% after its shares were upgraded to buy from
hold at Investec. There's "reasonable value" for the low-risk stock
after a 10% decline over 10 weeks, said Investec.
Russian stocks measured by the Micex Index moved down 0.5% to
1,298.77, sitting with a year-to-date decline of nearly 14% as
investors have fled the market in response to pro-Russian forces
occupying Ukraine's southern Crimea region. U.S. President Barack
Obama arrived in Europe on Monday, and will spend part of his
week-long trip urging European allies to enact tougher sanctions
against Russia.
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