European stocks fall despite upbeat eurozone data
Europe's main stock markets fell on Wednesday as poorly-received Chinese economic data offset some strong numbers out of the eurozone which boosted the euro, analysts said.
The euro, blamed by the French government for holding back its economy, rose against both the dollar and British pound.
London's benchmark FTSE 100 stock index slipped 0.18 percent to stand at 6,669.63 points in midday deals.
Frankfurt's DAX 30 shed 0.31 percent to 9,570.36 points and the CAC 40 in Paris lost 0.40 percent to 4,466.09 compared with Tuesday's closing level.
Wall Street slipped slighty in initial trading.
Official European Union data showed that the average eurozone government deficit -- the shortfall between revenue and spending -- was 3.0 percent of output last year, in line with the EU ceiling and down from 3.7 percent in 2012.
This together with a strong eurozone purchasing managers index was the latest indicator that the single-currency area is pulling well away from its debt crisis.
Meanwhile France, seen to be a laggard in the process of reform to cut the public deficit and raise competitiveness, promised measures to correct public finances, and to boost growth and jobs.
In New York, the Dow Jones index opened with a fall of 0.07 percent, and the Nasdaq edged down 0.02 percent, after strong gains on Tuesday driven by good quarterly company results, and despite concern about the crisis in Ukraine.
Huge deal-making in the pharmaceutical sector had given European and US stocks a shot in the arm on Tuesday.
"It hasn't all been doom and gloom in Europe on Wednesday, in fact there's been plenty to be encouraged by, although this clearly isn't filtering through to investors at the moment," said Craig Erlam, market analyst at traders Alpari.
"The PMI readings from the eurozone have actually been quite good, despite the small miss in the French readings."
He added: "Another positive this morning came from the successful auction of Portuguese 10-year debt, the first auction the country has completed in three years ... Like the PMI readings, this has been brushed off though, with investors potentially paying more attention to the HSBC manufacturing reading for China."
A closely-watched survey revealed that eurozone business activity hit a near three-year high in April as a modest economic recovery gained momentum and began creating much-needed jobs.
Markit Economics said its Eurozone Composite Purchasing Managers Index (PMI) for April, a leading indicator of overall economic activity, jumped to 54 points from 53.1 in March, the highest reading since May 2011.
A figure below 50 suggests shrinkage, while anything above points to growth.
- Portugal wins market confidence -
In a further sign of easing strains for the eurozone, Portugal easily raised 750 million euros in a landmark 10-year bond issue at a sharply reduced interest rate.
The funds, equivalent to $1.0 billion, were raised at an interest rate of 3.575 percent amid strong demand from investors, marking a crucial step on the country's road to emerging from an EU-IMF rescue programme on May 17.
Other data released on Wednesday showed a further contraction to Chinese manufacturing data, although the rate of decline has slowed.
HSBC said its preliminary purchasing managers index (PMI) for China came in at 48.3 in April, up from 48.0 in March.
Asian stock markets ended mixed on Wednesday in the wake of the Chinese data and following another Wall Street rally the day before.
In foreign exchange deals on Wednesday, the euro rose to $1.3845 from $1.3804 late in New York on Tuesday.
The European single currency climbed to 82.34 British pence from 82.05 pence, while the pound fell to $1.6814 from $1.6824 on Tuesday.
On the London Bullion Market, the price of gold fell to $1,283.50 an ounce from $1,286.75 on Tuesday.
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