European stock markets march 5 2012

European stock markets march 5 2012 : European stock markets declined Monday, led lower by banks and miners as data showed euro-zone business activity contracted more than initially thought in February and China cut its economic growth target.

The Stoxx Europe 600 index closed 0.6% lower at 265.56. Salzgitter AG was among the biggest decliners, falling 5.4% after the steel and technology firm reported an 18.6% increase in 2011 revenue, but said a repeat of the 2011 results would be "challenging" in 2012.

European stocks headed south as the Markit euro-zone composite purchasing managers index fell to 49.3 in February from 50.4 in January, below a preliminary estimate of 49.7. A reading below 50 indicates contraction in private-sector business activity.

"The recent rally has been based on liquidity and [U.S. Federal Reserve Chairman Ben] Bernanke didn't mention QE3 [a third round of quantitative easing] last week because the economy is a little better. That means less fiscal stimulus and less liquidity in the market," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Investors.

"Going forward the market has to move higher on economic data and with less liquidity and mixed economic data at the moment this [PMI data] is a good excuse to take profits."

Italy and Spain both contracted faster in February than in January, suggesting that growth for those countries looks to be a long way off.

"It's too early to call a reversal on the uptrend in the recovery in Europe. The crucial point is the beginning of summer and if we're still in trouble in June/July, markets will move away from its optimistic view," Gijsels said.

The Spanish IBEX 35 index declined 1.3% to 8,453.50, weighed by the country's banks.

BBVA SA pulled 1.8% lower, Banco Santander SA lost 2%, CaixaBank SA shed 1.3%, while Banco de Sabadell SA was 2.6% lower.

In the secondary market, yields on 10-year Spanish government bonds added six basis points to 4.95%.

Italy's FTSE MIB index closed 0.7% lower at 16,787.15, pressured by Banco Popolare SC, off 1.3%, Unione di Banche Italiane SCpA, down 1.3% and Banca Popolare dell'Emilia Romagna SCARL 3.1% lower.

Yields on 10-year Italian government bonds rose nine basis points to 4.93% in the secondary market.

Germany's composite PMI fell to a two-month low of 53.2 in February, adding pressure to the German DAX 30 index, which was off 0.8% at 6,866.46.

Among biggest decliners in the index, Commerzbank AG lost 3.3% and Deutsche Bank AG was down 2%.

Further weighing on the DAX, HeidelbergCement AG lost 3.6%, after ING downgraded the stock to hold from buy on the back of a 50% rally since September 2011.

European stocks remained in negative territory after the U.S. Institute for Supply Management said its non-manufacturing index rose to 57.3% in February from 56.8% in January, beating analysts estimates of 55.5%.

On a more downbeat note, the employment index slipped to 55.7% from 57.4%, while the price index, which measures inflation, jumped to 68.4% from 63.5%.

For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today

Related Post: