Europe open: Stocks start March on a down note

Stocks are under heavy selling pressure at the start of the month, with traders apparently continuing to try and digest the potential implications for equities of a modestly more hawkish policy bias from rate-setters in the US.

"Calls for a negative open derive from a sharply lower close on Wall St last night after disappointing stateside macro data prints and continued tighter Fed policy jitters which sent USD higher to hamper sentiment in Asia overnight. Miners weaker in Asia as metals suffer under stronger Greenback but both these and Oil are off their worst levels helped by better than expected unofficial China PMI Manufacturing that eased concerns after Wednesday's official report," said Mike van Dulken at Accendo Markets.

As of 1123 GMT, the benchmark Stoxx 600 was down by 0.91% or 3.47 points to 376.16, alongside a fall of 1.48% or 184.39 points to 12,251.26, while the FTSE Mibtel was under by 0.88% or 199.22 points and trading at 22,408.48.

Meanwhile, the yield on the benchmark 10-year Bund was trending lower, falling three basis points to 0.63%.

Nonetheless, the flow of economic data out on the Continent had in fact been rather buoyant.

Of particular importance, IHS Markit's euro area factory sector PMI slipped from a reading of 59.6 for January to a reading of 58.6 in February, which was nevertheless a tad ahead of the consensus forecast of 58.5.

Commenting on the data, Claus Vistesen, chief euro area economist at Pantheon Macroeconomics said: "Overall, these data signal solid momentum in Eurozone manufacturing albeit at a slightly slower pace in February compared to the breakneck pace at the start of the year. Growth is strongest in the investment good sector, but all industries are enjoying solid demand conditions.

"The expansion continues to push firms closer to their capacity limits; work backlogs are rising and companies are scrambling to find workers to meet increasing demand. Finally, both input and output price gauges point to much higher inflation pressures in coming months, although we haven’t seen much of this in the CPI data yet."

In parallel, Eurostat reported that the Eurozone's rate of unemployment dipped by a tenth of a percentage point last month to 8.6%, as expected by economists.

For later in the day, investors were waiting on a barrage of US economic data, including the latest reading on the 'core' personal consumption expenditures prices - the US central bank's preferred inflation gauge - at 1430 GMT and the ISM's factory sector purchasing managers' index at 1500 GMT.

On the corporate front, investors were keeping an eye on Deutsche Post's negotiations with its main union Verdi and its latest offer for higher wages, which Verdi said was below expectations.

Also in Germany, and of possible interest for Airbus, the country's defence ministry said it would give European jets preference over US made rivals in an upcoming tender to replace its veteran fleet of Tornado jets.