By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stocks saw steep losses on
Thursday, as euro-zone data disappointed a day after minutes from
the U.S. Federal Reserve's latest meeting illustrated a split over
the central bank's monetary-easing program.
The Stoxx Europe 600 index lost 1.2% to 285.66, with banks and
mining firms posting some of the biggest declines.
"We have quite a few triggers for nervousness coming through
today. You had a rise in the markets for a while and people were
becoming more and more nervous and looking for the first crack, "
said Justin Urquhart Stewart, co-founder of Seven Investment
Management.
"Nothing fundamentally has changed. On the longer term, the
economy is still healing, but markets were getting ahead of
themselves and waiting for economic data to back it up. We had a
wave of everyone thinking the glass was half full, but now that
perception has changed," he said.
Shares of heavyweight miner BHP Billiton PLC (BHP) shaved off
3.3%, after Citigroup cut the firm to neutral from buy, saying that
positive catalysts such as capital-expenditure cuts and cost
reductions are now priced in.
Shares of AXA SA gave up 2.2%, as the insurance firm reported a
drop in 2012 profit.
Investors further trained their attention on the U.S., where
minutes from the Federal Open Market Committee's January meeting
released late Wednesday showed some members expressed concerns
about the bank's $85 billion monthly asset purchases. Several
members said the central bank should prepare to vary the pace of
the quantitative-easing plan depending on the outlook. .
U.S. stocks fell sharply and retreated from multiyear highs
after the report, with stock futures also indicating a lower open
on Thursday. .
"We can expect markets to be a little bit more volatile from
here. People will be nervous until they get clarification on the
U.S. deficit, the Italian election, growth signals from Germany and
if the U.K. will lose its triple-A credit rating," Urquhart Stewart
said.
Back in Europe, preliminary readings of purchasing managers'
indexes from the major economies stole the limelight. The
preliminary composite purchasing-managers' index, or PMI, for the
euro zone slumped to a two-month low of 47.3 in February,
indicating the region's downturn steepened. Economists surveyed by
Dow Jones Newswires had forecast a February reading of 48.5. .
The manufacturing PMI for Germany rose to 50.1, a 12-month high,
while the same reading for France climbed to 43.6, marking a
2-month high. The French reading, however, missed expectations. A
reading above 50 indicates expansion.
Germany's DAX 30 index sank 1.7% to 7,594.70, with Deutsche Bank
AG (DB) down 3.6% and Commerzbank AG off 2.9%.
In France, Société Générale SA dropped 3.1%. The CAC 40 index
erased 1.6% to 3,650.49.
U.K.'s FTSE 100 index lost 1.6% to 6,295.13. Shares of HSBC
Holdings PLC (HBC) fell 1.9%.
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