European stocks slide; gold hits 2-year low on China GDP

European stock markets fell on Monday and gold plunged to a two-year low on news that the powerhouse Chinese economy slowed down in the first quarter of 2013, dealers said.

In afternoon trade, London's FTSE 100 index of top companies sank 0.82 percent to 6,332.18 points, Frankfurt's DAX 30 was off by 0.43 percent to 7,711.74 points and in Paris the CAC 40 lost 0.67 percent to 3,703.78 points.

On the London Bullion Market, gold prices slumped to $1,385.55 per ounce in the morning -- the lowest level since March 15, 2011 -- but later bounced back to stand at $1,416. That compares with $1,535.50 recorded late on Friday.

Silver recoiled $23.02 per ounce -- hitting a low point last witnessed in October 2010.

In New York, US stocks also retreated on the Chinese economic report.

The Dow Jones Industrial Average dropped 0.41 percent to 14,804.09 points in morning trade, while the broad-based S&P 500 fell 0.44 percent to 1,586.38, and the tech-rich Nasdaq Composite Index gave up 0.49 percent to 3,278.79 points.

China said its economy grew 7.7 percent in the first quarter of this year, well below the 8.0 percent forecast in a poll of 12 economists done by AFP and worse than the 7.9 percent in the previous three months.

The news raises questions about the strength of the world's number two economy, a key driver of global growth, analysts said.

"Weak economic growth in China has taken investors by surprise this morning and commodity stocks are weighing on the FTSE 100 index," said analyst Mike McCudden at online brokerage Interactive Investor.

"With the recent run or weaker global economic data investors have reached an impasse, and without a great deal in sight this week to inspire them, we should see markets drift lower," McCudden said. "Ongoing eurozone concerns will not help."

The data sparked a sell-off of mining stocks in Europe on Monday because China is a major consumer of raw materials.

"With the drops in gold and silver making the headlines, Fresnillo, Polymetal and Randgold Resources are the worst hit, all down over 5.0 percent," noted CMC Markets Matt Basi.

Fresnillo saw its share price collapse by 15.10 percent to 1,080.75 pence, Polymetal shed 9.72 percent to 775.5 pence and Randgold dropped 7.54 percent to 4,584 pence.

Antofagasta stocks fell 6.66 percent to 945.5 pence and Xstrata lost 5.52 percent to 985.4 pence.

Gold had already dived under $1,500 per ounce late on Friday, hit by fears that the US Federal Reserve could rein in its stimulus plans, and on news that crisis-hit Cyprus might sell reserves as part of its bailout programme.

In earlier trade, Asian markets also slipped on the disappointing batch of Chinese growth figures, with traders also keeping a wary eye on the Korean peninsula.

Tokyo stocks fell 1.55 percent as a pick-up in the yen also dampened sentiment.

Hong Kong shed 1.43 percent and Shanghai was down by 1.13 percent, while Sydney declined by 0.91 percent and Seoul nudged 0.20 percent lower.

In foreign exchange activity on Monday, the euro edged down slightly to $1.3103 in London afternoon deals, from $1.3106 late on Friday in New York.