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European stocks mixed on China, Ukraine strains

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(GlobalPost/GlobalPost)

Europe's main stock markets were mostly down on Monday in the wake of more downbeat Chinese economic data and on fears of an escalation of tensions over Ukraine, analysts said.

London's FTSE 100 index of top shares managed to edge up 0.02 percent to stand at 6,558.50 points in afternoon trading.

But the Paris CAC 40 shed 0.47 percent compared with Friday's closing values to 4,314.79 points and in Frankfurt the DAX 30 declined 0.24 percent to 9,320.58 points.

"What we are still lacking is a catalyst to drive markets higher from here," said Chris Beauchamp, market analyst at IG traders.

"A simple lessening of tensions in Ukraine, or merely in-line economic data, isn't enough. Russian forces massing on the Ukrainian border are enough to provoke fears of another annexation on the fringes of Europe.

"With the US dollar still in favour... the outlook remains cloudy for risk appetite," he added.

However US shares edged higher in opening trade Monday.

Five minutes into trade, the Dow Jones Industrial Average was up 0.36 percent to 16,361.43 points.

The broad-based S&P 500 added 0.27 percent to 1,871.48, while the tech-rich Nasdaq Composite rose 0.11 percent to 4,281.60.

Investors remain on edge over events in eastern Europe after Russia absorbed Crimea from Ukraine following a controversial referendum earlier in the month.

Markets are keeping an eye on Europe as US President Barack Obama -- who has led stiff Western sanctions against Moscow -- heads to The Hague for a gathering of world leaders that could see Russia excluded from the Group of Eight rich countries.

Data on Monday meanwhile showed that Chinese manufacturing activity contracted in March to its lowest level in eight months, prompting calls for policymakers to tackle a painful slowdown of growth in the world's number two economy.

The data are the latest in a string of weak indicators from Beijing, and economists said measures to inject life back into the Asian powerhouse were probably on the horizon.

HSBC's preliminary purchasing managers' index (PMI), which tracks manufacturing activity in China's factories and workshops, fell to 48.1 in March from a final reading of 48.5 in February, the British bank said in a statement.

The figure is down from 49.5 in January and was the worst result since July's 47.7, according to the bank. The final figure is due out on April 1.

In foreign exchange trading on Monday, the euro slid to $1.3772 from $1.3794 late on Friday in New York.

The dollar rose to 102.45 yen from 102.25.

The British pound rose to 1.1978 euros from 1.1952 on Friday, and to $1.6496 from $1.6486.

On the London Bullion Market, the price of gold fell to $1,324.14 an ounce from $1,336 on Friday.

On the corporate front, shares in Credit Agricole gained 2.0 percent to 11.44 euros after the French bank won a broker upgrade from Bank of America-Merrill Lynch.

Air Berlin soared 4.3 percent to 2.14 euros on rumours that Abu Dhabi's Etihad Airways is preparing to raise its stake in the group, in a move that would see the German budget carrier being de-listed from the Frankfurt stock exchange.

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http://www.globalpost.com/dispatch/news/afp/140324/european-stocks-mixed-china-ukraine-strains-0