Miners decline as China cuts economic growth forecast
MarketWatch
LONDON (MarketWatch) — European stock markets pulled back Monday, led lower by banks and miners, as business activity in the euro zone slipped back into contraction in February. China cut its economic growth forecast to its lowest level in eight years.
The Stoxx Europe 600 index XX:SXXP -0.24% lost 0.7% to 265.35. Shares in Salzgitter AG DE:SZG -5.12% topped the list of decliners, falling 5.6% 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 added to earlier losses after 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.
Italy and Spain both registered stronger rates of contraction in February than in January, suggesting that growth for those countries looks to be a long way off. Euro-zone PMI falls
The Spanish IBEX 35 index XX:IBEX -0.80% underperformed the rest of Europe’s country-specific indexes and declined 1.4% to 8,447.50, weighed by the country’s banks.
BBVA SA ES:BBVA -1.29% pulled 2.2% lower, Banco Santander SA ES:SAN -0.99% lost 1.8%, CaixaBank SA ES:CABK -0.94% shed 1.9%, while Banco de Sabadell SA ES:SAB -1.94% was 1.5% lower.
In the secondary market, yields on 10-year Spanish government bonds ES:10YR_ESP +0.18% added 6 basis points to 4.95%.
Italy’s FTSE MIB index XX:FTSEMIB -0.12% traded 1.1% lower at 16,718.72, pressured by Banco Popolare SC IT:BP -0.25% , off 2.7%, Unione di Banche Italiane SCpA IT:UBI -0.66% , down 1.8%, and Banca Monte dei Paschi di Siena SpA IT:BMPS +0.88% , which was 1% lower.
Yields on 10-year Italian government bonds IT:10YR_ITA -0.11% gained 13 basis points to 4.96% 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 DX:DAX -0.42% , which was off 1% at 6,849.92.
Among biggest decliners in the index, Commerzbank AG DE:CBK -3.14% lost 3% and Deutsche Bank AG DE:DBK -0.62% was down 2.3%.
Further weighing on the DAX, HeidelbergCement AG DE:HEI -2.61% lost 3.3%, after ING downgraded the stock to hold from buy on the back of a 50% rally since September 2011.
Miners were also among the biggest decliners in Europe, after Chinese Premier Wen Jiabao at the annual National People’s Congress reportedly cut the country’s economic growth target to 7.5% for 2012 after keeping it at 8% for the past eight years. China lowers growth target
The world’s second largest economy is a large consumer of natural resources and indications about future growth tend to influence mining stocks.
In London, Kazakhmys PLC UK:KAZ -2.90% shed 3.1%, Fresnillo PLC UK:FRES -1.74% fell 2.2% and heavyweight Rio Tinto PLC UK:RIO -2.39% RIO -2.04% was off 2.7%.
The FTSE 100 index UK:UKX -0.12% traded 0.4% lower at 5,884.87.
Supporting the U.K. index, BP PLC UK:BP +1.47% BP +1.37% added 1.7% after the oil group said late Friday it had reached a $7.8 billion settlement with a “substantial majority” of the plaintiffs in the Gulf of Mexico oil spill trial.
HSBC Holdings PLC UK:HSBA -1.44% HBC -1.27% tracked lower with the broader European banking sector and shed 1.4%.
In France, the CAC 40 index FR:PX1 -0.12% declined 0.7% to 3,475.88, weighed by Credit Agricole SA FR:ACA -0.63% , which was off 1.4%, Societe Generale SA FR:GLE -1.12% , down 2%, and BNP Paribas SA FR:BNP -1.33% which declined 2%.
Also down in Paris, Veolia Environnement SA FR:VIE -0.45% edged 1.4% lower, after rallying 23% last week on the back of earnings.
Bucking the negative trend in Europe, Russian stocks pushed higher after Vladimir Putin Sunday night won a return to the presidency in the country’s elections. Russia’s RTS stock index RU:RTS +1.57% added 1% to 1,743.53. Russia’s benchmark RTS index
