Europe open: Stocks waver as investors digest Chinese data

At 0850 GMT, the benchmark Stoxx 600 index was down 0.1%, Germany’s DAX was was 0.3% lower and France’s CAC 40 was off 0.4%.

Manufacturing data out of China came in softer than expected. The official purchasing managers’ index came in at 49.4 in January from 49.7 the previous month.

This was below the 50 mark that separates contraction from expansion, missing economists’ expectations for a reading of 49.6 and marking the weakest reading since August 2012.

Meanwhile, the Caixin survey, which tracks smaller firms than the official figures, edged up to 48.4 in January from 48.2 the previous month. This was better than expected but still in contraction territory.

The official non-manufacturing PMI slipped to 53.5 in January from 54.4 in December, according to the National Bureau of Statistics. Although the reading was weaker on the month, it managed to stay in expansion territory.

Rebecca O’Keeffe, head of investment at Interactive Investor, said: “Chinese manufacturing PMI fell for the sixth consecutive month, reaching a three year low and causing increasing concern on the state of the Chinese economy. The worse-than-expected results have temporarily halted the commodity rally, but investors are still banking on Chinese policymakers to pull out all the stops and provide momentum for growth.”

O’Keeffe pointed out that this would be a busy week for investors.

“Big macro events include PMI data, the Iowa caucus, Super Thursday in the UK and US payrolls on Friday, while at a micro level this week brings huge numbers of company earnings.”

On the corporate front, BT Group was in the black after posting a rise in third quarter revenues and unveiling a new restructuring.

Ryanair flew higher after reporting a jump in third quarter profit as traffic grew strongly and the budget airline announced a €800m share buyback programme.

Bankia surged after the Spanish bank’s fourth quarter profit beat expectations.

On the downside, Nokia and Alcatel shares tumbled after Nokia settled a patent dispute with Samsung.

Elsewhere, Rolls-Royce was a touch weaker despite announcing a $2.7bn order from Norwegian Air.