By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved lower
across the board on Wednesday, as lingering concerns about a
slowdown in China and Ukraine/Russia tensions hit sentiment. Weak
industrial-production data from the euro zone also hampered the
investing mood.
The Stoxx Europe 600 index slid 1.1% to end at 327.95, closing
at the lowest level in a month.
Weighing on the pan-European benchmark, shares of G4S PLC lost
5.3% after the security company said it swung to a loss in 2013,
partly due to a 386-million-pound ($642 million) restructuring
charge.
Shares of Valeo SA dropped 2.1% after the French government sold
a 2.5% stake in the auto-parts manufacturer for 200 million euros
($277 million).
On a more upbeat note, shares of Prudential PLC rose 2.7% after
the U.K. insurer raised dividends and said it extended its
strategic partnership with bank Standard Chartered PLC . Standard
Chartered shares closed 1% lower.
Adecco SA climbed 4.5% after the staffing firm reported
fourth-quarter earnings ahead of expectations.
More broadly, European stock markets already from the open
mirrored the weak trading day in Asia, where Japan's Nikkei slumped
2.6% and Hong Kong's Hang Seng Index dropped 1.7%. The losses came
as worries over a slowdown in China continued to weigh on the
trading mood, after a surprise decline in Chinese exports rattled
markets at the beginning of the week.
In January, weaker-than-expected manufacturing data from the
world's second-largest economy triggered a wider market rout, with
emerging markets and their currencies hit especially hard. A major
concern is that a hard landing in China could slow growth globally,
after years of stellar expansion in the country helped boost the
international economy. Read: China may giveth to banks, after China
taketh away
Continued Russia/Ukraine tensions further spurred the selling in
equities. The leaders of the Group of Seven biggest economies urged
Russia not to annex Ukraine's Crimea region and warned, should
Russia still take the step, that the G7 would respond with further
action "individually and collectively".
Markets in Europe were also hit by data showing a surprise drop
in industrial production for the euro zone in January. Output fell
0.2% from December, below consensus estimates of a 0.5% rise.
Figures for December, however, were revised higher to a drop of
0.4% from the 0.7% decline previously reported.
Howard Archer, chief U.K. and European economist at IHS Global
Insight, said the data marked a disappointing start to 2014 for the
manufacturing sector, but that the underlying numbers are more
encouraging. The January figures were dragged lower by a 2.5% drop
in energy output, while output of capital goods rose 0.9%,
signaling business investment may have started to pick up in the
region, Archer said.
"The overall impression is that the euro-zone manufacturing
sector is currently on a modest recovery path," he said in a
note.
Several European Central Bank officials were also on the
calendar on Wednesday. Benoît Coeuré, an executive board member
with the ECB, said there are no signs of deflation in the currency
union, but that it is a possible risk. Low inflation in recent
months has stoked concerns of deflationary pressures and most
economists had expected the ECB to either cut rates or otherwise
loosen monetary policy at its meeting last week. The bank, however,
stood pat, with ECB President Mario Draghi appearing in no rush to
further ease the economy.
Meanwhile, executive board member Peter Praet indicated the
central bank is moving closer to making a decision on whether to
publish the minutes from central bank meetings.
Among country-specific indexes, the U.K.'s FTSE 100 index
dropped 1% to 6,620.90, while France's CAC 40 index gave up 1% to
4,306.26. Germany's DAX 30 index slid 1.3% to 9,188.69. Read: This
chart shows why the DAX could continue to underperform
U.S. stocks were also mostly lower on Wall Street.
More must-reads from MarketWatch:
Europe's hot new export is deflation
Jeff Gundlach: China bears watching; the taper may get tapered
(recap)
West warily readies sanctions on Russia
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