By Dow Jones Business News,
January 23, 2014, 11:57:00 AM EDT
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
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.'sFTSE 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.
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