By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved sharply
lower on Thursday after a disappointing reading on the Chinese
manufacturing sector sparked fears of slower growth in the global
economy.
"It's been a difficult trading day. This Chinese data has been a
bit of a spook for risk appetite," said Richard Perry, market
analyst at Hantec Markets.
"These markets haven't really been pushing on with any great
strength recently and the Chinese data, which were below
expectations, gave investors a bit of a jolt and an opportunity to
take some profits and start fresh at lower levels," he added.
"Chinese growth data out earlier this week also showed a slowdown
and now the disappointing PMIs have put a bit of doubt in people's
mind about global growth."
The Stoxx Europe 600 index dropped 1% to close at 332.69,
marking the biggest one-day percentage loss since early
December.
Among notable movers in the pan-European index, shares of
Pearson PLC slumped 8.2% after the publisher said it continues to
face tough trading this year.
Nokia Oyj (NOK) sank 11% after fourth-quarter revenue at the
Solutions & Networks unit, which accounts for 90% of the "new"
Nokia sales without the handset unit, dropped 22%. Nokia is in the
process of transferring its handset unit to Microsoft Corp.
(MSFT).
EasyJet PLC lost 4.1% after the budget airliner said it expects
to report a first-half pretax loss of between 70 million pounds
($116 million) and GBP90 million.
Shares of Industria de Diseno Textil SA , also known as Inditex,
slid 1.9% after Exane BNP Paribas cut the Spanish retailer to
neutral from outperform.
On a more upbeat note, shares of Delhaize Group SA rallied 7.2%
after the Belgian supermarket company said revenue rose in the
fourth quarter and it will continue to cut costs in 2014.
More broadly, investors weighed the latest round of purchasing
managers' indexes from the euro zone and China. The manufacturing
PMI for the currency union rose to a 32-month high in January,
beating analysts' expectations and providing further evidence the
region is recovering.
On a country-specific level, Germany's manufacturing PMI rose to
a 32-month high of 56.3, beating analyst expectations. France's
manufacturing sector continued to contract, albeit at a slower pace
than in December. A level above 50 signals expansion.
In China, the HSBC/Markit manufacturing PMI unexpectedly fell to
a six-month low of 49.6, indicating that the sector is contracting.
Mining and oil firms in Europe declined after the data, on fears
the slowdown could mean a weaker demand for raw materials in China,
which is one of the world's biggest users of natural resources.
Shares of Glencore Xstrata PLC (GLCNF) dropped 0.9%, BHP
Billiton PLC (BHP) fell 0.5% and oil giant BP PLC (BP) gave up
1.1%.
The U.K.'s FTSE 100 index lost 0.8% to 6,773.28. France's CAC 40
index slumped 1% to 4,280.96, and Germany's DAX 30 index fell 0.9%
to 9,631.04.
U.S. stocks also traded with sharp losses.
More must-reads from MarketWatch:
Tech leaders call for greater NSA transparency
'Dr. Om' or 'Dr. Doom'? Roubini gets meditative in Davos
Some doubt in Washington about 'El-Erian to Fed' talk
Subscribe to WSJ: http://online.wsj.com?mod=djnwires