Forexpros – European stocks traded sharply lower Thursday, dropping for the fourth straight session, on contracting manufacturing in China and the euro zone.
Near the close of European trade, the EURO STOXX 50 traded down 1.46%, France’s CAC 40 fell 1.56%, while Germany’s DAX traded off 1.27%. Meanwhile, in the U.K. the FTSE 100 moved higher 0.79%.
The equity sell off was fueled after Markit stated that its preliminary euro zone manufacturing purchasing managers’ index fell to 47.7 in March from a final reading of 49.0 the previous month, below expectations for a rise to 49.6.
In addition, the report indicated that the services purchasing managers’ index fell to to 48.7 from 48.8 in February. Analysts had expected the services PMI to rise to 49.3 in March.
The data came after a report showed that industrial new orders in the euro zone tumbled by a seasonally adjusted 2.3% in January, compared to expectations for a 2.1% drop.
Earlier in the day, data showed that manufacturing activity in Germany slowed to the lowest level in four months in March, while the services sector also hit a four-month low.
Sentiment also weakened after a report showed that Chinese manufacturing activity contracted for a fifth consecutive month, underlining concerns over a possible slowdown in growth in the world’s second largest economy.
The reports overshadowed data showing that U.S. jobless claims fell to the lowest level since February 2008 last week.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 17 fell by 5,000 to a seasonally adjusted 348,000, beating expectations for a decline of 3,000 to 350,000.
The previous week’s figure was revised up to 353,000 from 351,000.
Ultra luxury retailer, Hermes International, climbed 2.3% after posting earnings that exceeded expectations.
Bank of Ireland plunged 7.4% when Citigroup initiated coverage with a sell recommendation.
SGL Carbon, the German carbon material maker, soared 7.8% after reporting a 40% net income spike and a dividend.
In U.S. midsession trade, stocks are lower with the Dow down 0.49%, the S&P 500 off 0.63% and the Nasdaq Composite giving back 0.25%.
Investors are awaiting U.K. investor confidence and U.S. new home sales on Friday.
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