European Stocks Mixed, Asia Slumps Amid Weak China Manufacturing Data
LONDON (The Deal) -- European markets were mixed Monday morning, despite a slump in Asia after new economic data in China showed the manufacturing sector still struggling. The Chinese currency, the renminbi, also weakened against the dollar, despite an increase in the daily fixed rate which was intended to follow the previous movements of the markets.
The surprise outcome of a general election in Turkey, where President Recep Tayep Erdogan's AK Party regained the overall majority it lost in the summer, sparked a rally on Turkey's Bolsa Istanbul exchange. The Istanbul 100 was up 5.61% at 83,860.50 by early afternoon local time.
Continental European markets started weak, but strengthened after the release of better than expected manufacturing data from Greece and Italy as well as a slight improvement for the eurozone as a whole. The Markit Ltd. purchasing managers index for October came in at 52.3, higher than September's reading of 52. Markit described the eurozone recovery as "insipid."
But in the U.K. Markit reported the best reading in the manufacturing index since June 2014. U.K. manufacturing PMI came out at 55.5 -- up from just 51.8 in September -- after a strong third quarter. A reading of over 50 signals growth.
In London, the FTSE 100 was down 0.42% at 6,334.65, while in Frankfurt the DAX was up 0.55% at 10,909.46, and in Paris the CAC 40 was up 0.18% at 4,906.68.
Irish budget airline Ryanair Holdings (RYAAY) - Get Report slumped in early trading, although it recovered much of the loss later. That was despite issuing a bullish forecast on full-year profits based on lower prices for its unhedged fuel and what it described as a "bumper summer" of holiday traffic. It said it expected to benefit from even lower prices in the coming years as it had now hedged in 95% of its 2017 fuel requirement at $62 a barrel.
Rival EasyJet (ESYJY) also made a sharp descent this morning -- dropping 2.46% to 1,707 pence. But that had more to do with downgrades for both EasyJet and full price operator International Consolidated Airlines Group from analysts at HSBC Holdings. However, IAG rose 0.7% to 586.50 pence.
Elsewhere, Hikma Pharmaceuticals (HKMPF) fell sharply, reversing the gains it made at the end of last week, on an announcement that its generics business had not been performing well. Hikma was down 5.18% at 2,052 pence.
Minin company Lonmin (LNMIF) was hurt by weak platinum prices which caused it to announce write downs of around $2 billion. Lonmin was down nearly 2% at 25.00 pence a share.
Meanwhile, in Stockholm, home appliance maker Electrolux (ELUXF) was down almost 7% at Skr234.70, after it emerged on Friday that the U.S. Department of Justice had rejected a proposal seeking to resolve a government lawsuit seeking to block the Swedish company's $3.3 billion acquisition of General Electric's (GE) - Get Report household appliance business. Electrolux said it's not in talks with the Justice Department over a settlement and that it is preparing to defend the deal in a trial starting on Nov. 9.
In Spain, lender Bankia, once the poster child for Spain's financial crisis, reported better than expected third quarter resuts, with net income at €300 million ($330.6 million), and an improved non-performing loan ratio of 11.4%. Bankia was up 1.45% at €1.19.
In Asia, the main markets closed down overnight. In Tokyo, the Nikkei 225 was off 2.10% at 18,683.24 while the Topix finished the day down 2% at 1,526.97. Hong Kong's Hang Seng dropped 1.19% to close at 22,370.04, while in China the Shanghai Composite was off 21.70% at 3,325.084 and the tech-heavy Shenzhen Composite was off 1.64% at 3,475.96. However, South Korea's Kospi Index closed up 0.28% at 2,035.24.