LONDON, March 23 (BSS/AFP) - Europe stocks and the euro slid yesterday following unexpectedly weak eurozone economic data and after disappointing Chinese figures, analysts said.
A further drop in US new jobless benefits claims failed to turn the tide, with London's FTSE 100 benchmark index of leading shares closing down 0.79 percent to 5,845.65 points.
Frankfurt's DAX 30 slumped 1.27 percent to fall back below
the 7,000 point level and end the day at 6,981.26 points, while
in Paris the CAC 40 shed 1.56 percent to drop below the 4,000-
point level and finish at 3,472.46 points.
The euro dropped to $1.3190 from $1.3213 late in New York on
"Growth concerns across the globe are finally taking their
toll on equities as investors are doubtful the US alone can lead
a global recovery," said Spreadex trader Jordan Lambert.
"Outside the US the economic picture seems really bleak as
we have austerity cutting away at growth in Europe and China's
manufacturing activity and resource demands continue a
contracting trend," he added.
Eurozone private sector activity fell more sharply than
expected in March with the composite purchasing managers' index
(PMI), a key leading-indicator, dropping to 48.7 points.
A reading above 50 means expansion, while below 50 suggests
"The eurozone economy contracted at a faster rate in March,
suggesting that the region has fallen back into recession, with
output now having fallen in both the final quarter of last year
and the first quarter of 2012," said chief economist Chris
Williamson at Markit, which compiles the PMI survey.
The downturn, however, is "very mild," with the PMI
signalling a contraction of around 0.1 and 0.2 percent.
A general strike in Portugal and data that showed Ireland
tipping back into recession also clouded the waters.
Irish gross domestic product shrank 0.2 percent in the
fourth quarter after a contraction of 1.1 percent in the third
quarter, the Central Statistics Office said in a statement,
placing Ireland back into a technical recession.
However European Central Bank chief Mario Draghi said the
worst is over in the eurozone debt crisis.
"The worst is over, but risks remain," Draghi told the daily
Bild, Germany's most widely-read newspaper.
In China, manufacturing activity fell to a four-month low in
March, HSBC bank said on Thursday, adding fuel to concerns over
slowing growth in the world's second largest economy.
HSBC's preliminary PMI fell to 48.1 in March from 49.6 in
February, following a sharp slowdown in exports, the British
banking giant said in a statement.
The Chinese data weighed heavily on the mining sector, as
China is a huge consumer of raw materials.
Shares in Randgold Resources dove 12.59 percent to 5,765
pence, although the Africa-focused miner was also hit by concerns
that a military coup in Mali could disrupt its operations,
Fresnillo fell 6.68 percent to 1,621 pence, Vedanta
Resources dropped 4.81 percent to 1,287 pence and steel group
ArcelorMittal lost 4.27 percent to 14.78 euros.
Asian stock markets earlier closed mixed as traders
responded to a surprise trade surplus from Japan as well as the
weak data out of China.
Tokyo ended with a gain of 0.40 percent, while Shanghai fell
Wall Street fell despite new claims for US unemployment
benefits continuing to fall last week to a fresh four-year low.
The Dow Jones Industrial Average was down 0.51 percent to
13,057.83 points in midday trade. The broader S&P 500 fell 0.69
percent to 1,393.25 points, while the tech-heavy Nasdaq slid 0.36
percent to 3,064.12 points.
"Neither corporate news nor a multi-year low in weekly
initial jobless claims have been able to meaningfully improve
sentiment," said analysts at Briefing.com.
The US Labor Department said on Thursday that 348,000
initial jobless claims were filed in the week ending March 17,
down from a revised 353,000 in the prior week.
The weekly claims data, though volatile, have suggested
momentum in the labour market recovery.