European Stocks Sink on Weak Eurozone Data

LONDON ( The Deal) -- European markets sank in early trading on Monday and Asian markets were mixed.

The day in Asia started well, buoyed in part by stronger than a stronger-than-expected HSBC preliminary purchasing managers index flash for China unexpectedly showing a return to growth in June after five months of contraction. But China stocks traded in Hong Kong put in a poor performance, especially in the automotive sector. European stocks were hit by disappointing eurozone purchasing managers indices from Markit, with a particularly sharp drop in France to a four-month low and well into contraction territory. And the turmoil in Iraq -- with its potential impact on oil prices -- has also tempered market enthusiasm this morning.

Much attention Monday is centered on General Electric's (GE) apparent success in winning its fight against Siemens (SI) and Mitsubishi Heavy Industries in the battle for French engineering group Alstom. The deal values Alston at 11.4 billion euros ($15.5 billion). GE will buy Alstom's generator manufacturing unit, renewable power operations and power grid operations, while Alstom will buy GE's train signaling operations, for an enterprise value of about 600 million euros. Alstom will also reinvest in joint ventures in the grid, renewable energy, and nuclear and steam turbine operations, while the French government will acquire a 20% stake in Alstom from French conglomerate Bouygues.

Alstom's own share was flat this morning, but Siemens was down 1.14% in late morning at 99.13 a share euros, while MHI was up 1.8% in Tokyo at 638 yen. GE, which trades on the Swiss Stock Exchange in Zurich, advanced 0.82% to Sfr20.45. Bouygues was down 0.09% at 32.25 euros.

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