By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- After three straight months of gains,
European stock markets mostly dropped on Monday, with investors
digesting a mixed round of purchasing managers' indexes from China
and major euro-zone economies.
The Stoxx Europe 600 index slipped 0.3% to close at 324.10 after
swinging between small gains and losses earlier in the session.
"This is one of those days where we find the pre-Christmas
season starting to kick in. People are beginning to close down
their trading and nobody wants to make any big moves ahead of the
year-end," said Peter Dixon, strategist at Commerzbank in
London.
"I think between now and the next three weeks we'll get a
reasonable amount of volatility," he added.
Among major decliners, shares of ThyssenKrupp AG slid 8.5% after
the steelmaker over the weekend said it found a buyer for its
Alabama steel plant and that it plans a capital increase of up to
10%.
Mining firms were also among major losers, tracking losses for
most metals prices. Shares of Fresnillo PLC declined 8.8%, Randgold
Resources Ltd. fell 4.4% and heavyweight BHP Billiton PLC (BHP)
lost 2%.
Among country-specific indexes, Spain's IBEX 35 index posted one
of the biggest losses in Europe, down 0.9% at 9,745.50, after a
weak reading on the country's manufacturing sector. The
manufacturing PMI fell to 48.6 in November from 50.9 in October,
signaling a decline in activity.
For the broader euro zone, the final manufacturing PMI rose to
51.6 in November, up from a flash estimate of 51.5. Output, new
orders and new exports all expanded for the fifth successive month,
but failed to halt the continuing slide in manufacturing
employment, Markit said.
Data out of Germany showed orders for plant and machinery
industry plummeted in October amid a sharp drop in demand from
outside the euro zone, according to industry group VDMA.
Europe movers
Germany's DAX 30 index ended slightly lower at 9,401.96.
France's CAC 40 index fell 0.2% to 4,285.81 and the U.K.'s FTSE
100 index lost 0.8% to 6,595.33.
Shares of L'Oréal SA gained 1.7% in Paris after the cosmetics
maker late Friday said it'll buy back as much as 500 million euros
($677 million) worth of shares.
Shares of Debenhams PLC slid 3.9% in London after Barclays cut
the department store to underweight from equal weight.
Tesco dropped 2% after HSBC cut the supermarkets chain to
underweight from neutral. The analysts said that a fall in margins
is inevitable and a margin reset is necessary.
Italy's FTSE MIB index slid 1.5% to 18,732.56, weighed by shares
of Saipem SpA , down 3%. The oil-field-services firm moved lower
after J.P. Morgan Cazenove cut it to underweight from neutral,
according to Dow Jones Newswires.
Investors in Europe also digested data from China, where HSBC's
monthly survey of China's manufacturing sector came in at 50.8 for
November, up from an initial estimate of 50.4 and almost unchanged
from 50.9 the previous month. The result was largely in line with
China's government-sponsored version of the PMI, which was
unchanged from October. Asia stocks closed mixed.
In the U.S., stocks traded mostly lower after a
stronger-than-expected reading on November manufacturing activity
stoked worries the Federal Reserve will move to reduce its
bond-buying program sooner than expected.
"Combined with stronger data lately for retail sales, building
permits and initial jobless claims it raises the probability of Fed
tapering already in December. If we get a close to 200,000 print as
expected on U.S. employment on Friday the probability on December
versus January tapering is 50-50 in our view," Allan von Mehren,
chief analyst at Danske Bank, said in a note.
The U.S. nonfarm-payrolls report for November is out on Friday
and economists surveyed by MarketWatch expect 180,000 new jobs to
have been added to the economy.
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