By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved lower
across the board on Wednesday, tracking a negative trading mood in
Asia where lingering concerns about a slowdown in China hit
sentiment. Weak industrial-production data from the euro zone also
hampered the investing mood.
The Stoxx Europe 600 index slid 1.1% to 328.02, setting it on
track for the lowest close in a month.
Weighing on the pan-European benchmark, shares of G4S PLC lost
6.7% 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 1.8% 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 rallied 3% after
the U.K. insurer raised dividends and said it extended its
strategic partnership with bank Standard Chartered PLC . Standard
Chartered shares traded 0.8% lower.
Adecco SA climbed 4.9% after the staffing firm reported
fourth-quarter earnings ahead of expectations.
More broadly, European stock markets 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
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 0.9% to 6,622.75, while France's CAC 40 index gave up 1.3%
to 4,294.73. Germany's DAX 30 index slid 1.2% to 9,194.46. Read:
This chart shows why the DAX could continue to underperform
U.S. stock futures also pointed to a lower open 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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