By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks were in the red on
Thursday after a weaker-than-expected report on China's
manufacturing activity, which compounded the impact of some
hawkishness contained in the minutes of the Federal Reserve's
January meeting.
Economic data from the euro zone also hurt the Stoxx Europe 600
index , leaving it still off 0.6% at 332.84, after edging up 0.1%
on Wednesday. French consumer prices tumbled, and the weak French
economy weighed on euro-zone business activity.
Decliners heavily outweighed gainers, with banks, drugs and
mining stocks driving the losses.
Among individual stocks, BAE Systems PLC (BAESY) slumped 8%
after the company posted a fall in 2013 net profit and guided lower
for 2014 earnings. A day earlier, Germany canceled a
multi-billion-euro order for the Eurofighter Typhoon jets, and that
overshadowed news about completion of talks to reprice a deal to
sell that aircraft to Saudi Arabia.
Randstad Holdings NV slid 8%. The Dutch staffing group said it
swung to a profit in the fourth quarter of 2013 and revenue rose
1%, and also expects a gradual recovery to continue.
Shares of packaging company Rexam PLC fell close to 5% after
posting a rise in full-year earnings as it won back North American
market share, but also saw weakness in Western Europe and South
America.
Aegon NV fell over 6% after the Dutch insurer posted a 60% slide
in net profit owing to hedging losses.
On the upside, shares of Technip SA leapt 8% after the French
oil-services company said it expects operating margin at its key
subsea unit of 12% in 2014, down from 13.5% in 2013. The company's
board approved a 10% dividend increase.
Setting the stage for European stocks, Asia markets suffered
losses across the board after sluggish trade data out of Japan and
a contraction in China's manufacturing sector to a seven-month low,
based on a preliminary HSBC/Markit "flash" version of its
Purchasing Managers' Index.
Though analysts said the data may not represent the full picture
for Chinese factories, it nonetheless added to gloom triggered by
Wednesday's Fed minutes that showed some members calling for a rise
in rise in short-term interest rates as early as mid-2015.
In Europe, Markit data showed business activity in the euro zone
lost momentum in February, owing to weakness in France, the
region's second-largest economy. The monthly gauge of activity
across the manufacturing and services sectors of the 18-nation euro
zone, fell to 52.7 in February from 52.9 the previous month.
French consumer prices posted a record fall in January,
retreating 0.6% from December, which was more than expected from
analysts polled by The Wall Street Journal.
The French CAC 40 was off 0.4% to 4,321.79. Heavyweight Danone
SA rose over 2% The company said sales growth would be steady this
year as it posted a fall in net profit and operating profit also
fell. Veolia Environnement SA shares rose over 1% after announcing
a EUR500 million ($685 million) contract to handle waste management
in Buenos Aires.
The German DAX 30 index fell 1.3% to 9,537.74, with Bayer AG off
1.6% and BASF SE down 1.7%.
The FTSE 100 index fell 0.3% to 6,777.73.
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