By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stocks retreated on Monday
after a surprisingly steep drop in German industrial production
data sparked worries that Europe's economic engine is losing
steam.
The Stoxx Europe 600 index dropped 0.9% to close at 344.80,
after finishing last week with the biggest weekly advance since
March.
Germany's DAX 30 index slumped 1% to 9,906.07, while France's
CAC 40 index gave up 1.4% to 4,405.76. The U.K.'s FTSE 100 index
slid 0.6% to 6,823.51.
The losses came after data showed industrial production in
Germany dropped 1.8% in May, marking the biggest monthly slide
since April 2012. That is well below expectations of a flat rate
for May in a survey of economists by The Wall Street Journal.
That followed a report on Friday that showed German
manufacturing orders fell 1.7% in May, also weaker than expected,
while softer-than-forecast unemployment data out last week further
raised red flags.
Steen Jakobsen, chief economist at Saxo Bank, has expressed
concerns about Germany's robustness and said the country could hit
zero economic growth by the first quarter of 2015. See more in our
Need to Know blog.
Movers
Among notable movers in Europe, shares of Sky Deutschland AG
dropped 4.1% after Nomura cut the cable-TV company to neutral from
buy, according to Dow Jones Newswires.
SABMiller PLC slipped 1.3% as the brewer said it plans to sell
its 40% stake in African hotel and casino group Tsogo Sun Holdings
Ltd. for around $1.09 billion.
Swiss insurer Helvetia Holding AG lost 1.2% after the company
said it has agreed to buy a majority stake in Nationale Suisse,
offering shareholders 80 Swiss francs ($89) per National Suisse
share.
On a more upbeat note, PostNL NV surged 19% after the Dutch
postal company raised its full-year guidance following a strong
mail performance in the Netherlands.
Also on the rise, Tele2 AB advanced 1.8% after the Swedish
telecom operator said it will sell its mobile unit in Norway to
rival Swedish telecom company TeliaSonera AB for a cash value of
5.3 billion Swedish kronor ($773.9 million). TeliaSonera ended 1.9%
higher.
Trading in Gowex SA shares was halted for a third day after the
Spanish wi-fi provider said on Sunday it had filed for bankruptcy
protection after the company's chairman acknowledged falsifying
accounts and resigned.
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