European Markets Hammered By Weak Chinese Data

(RTTNews) - The European markets ended Tuesday's session sharply lower, as concerns over China worsened. Weak manufacturing data from China weighed on shares of mining and luxury goods companies. European financial and insurance stocks were also under pressure, with investors in a very negative mood. The weak opening of the U.S. markets and the unexpected drop in U.S. manufacturing data also contributed to the sell-off.

Chinese manufacturers reported the sharpest deterioration in operating condition in more than six years in August and the service sector expanded at the slowest pace in the current 13-month sequence of growth.

The manufacturing Purchasing Managers' Index fell to 47.3 in August, which was the lowest reading since March 2009, survey data from Caixin Insight Group and Markit showed Tuesday. The sector has been contracting for six successive months. The reading was above the flash score of 47.1 but was down from 47.8 in July.

The services PMI came in at 51.5 in August, down from 53.8 in July. It signaled the slowest increase in activity in the current 13-month sequence of expansion.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 2.47 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 3.08 percent.

The DAX of Germany dropped by 2.38 percent and the CAC 40 of France fell by 2.40 percent. The FTSE of the U.K. declined by 3.03 percent and the SMI of Switzerland finished lower by 2.30 percent.

In Frankfurt, Deutsche Bank dropped by 3.03 percent and Commerzbank lost 2.26 percent.

Volkswagen declined by 3.27 percent and BMW fell by 2.58 percent. Daimler also finished lower by 2.44 percent.

Bayer weakened by 3.51 percent and Merck surrendered 2.58 percent.

In Paris, Societe Generale decreased by 3.41 percent and BNP Paribas fell by 2.95 percent. Credit Agricole dropped by 2.81 percent and AXA lost 3.92 percent.

Renault declined by 3.43 percent and Peugeot tumbled by 2.21 percent. Car parts maker Valeo also finished down by 3.66 percent.

In London, mining stocks were under pressure due to the weak Chinese manufacturing data. Glencore sank by 9.98 percent and Anglo American dropped by 7.64 percent. BHP Billiton tumbled by 6.71 percent and Antofagasta lost 5.67 percent. Rio Tinto also declined by 4.90 percent.

Man Group dropped by 6.77 percent, after a report said China took into custody the company's country unit head to assist an investigation into market volatility.

Aga Rangemaster surged by 11.36 percent, after it received an approach regarding a possible cash offer from US-based home appliances giant Whirlpool Corp.

In Stockholm, Elekta gained 7.91 percent. The medical equipment maker still expects to return to growth in the second half of the year.

Eurozone unemployment rate unexpectedly dropped in July to its lowest level in three-and-a-half years, adding to hopes that consumer spending would support growth amid low inflation. The unemployment rate fell to 10.9 percent in July, after holding steady at 11.1 percent in the previous two months, data from Eurostat revealed Tuesday. The figure was expected to remain at the 11.1 percent level for a fourth straight month.

Germany's unemployment declined more than expected in August, reports said citing data from the Federal Labor Agency on Tuesday. The number of unemployed declined by 7,000 in August from July. Economists had forecast a decrease of 4,000.

Germany's unemployment rate held steady in July, figures from Destatis showed Tuesday. The jobless rate came in at an adjusted 4.7 percent in July, the same rate as in the previous month. In the corresponding month last year, the rate was 5.0 percent.

Eurozone factory expansion slowed marginally in August, while the pace was estimated to have remained unchanged earlier, final data from Markit Economics showed Tuesday. The purchasing managers' index for the manufacturing sector dropped to 52.3 from 52.4 in July. In the preliminary report, released earlier, the PMI score was shown to have held steady at the previous month's level.

Germany's manufacturing sector registered its fastest growth in 16 months in August, final data from Markit showed Tuesday. The Markit/BME final manufacturing PMI rose to 53.3 in August from 51.8 a month ago. The initial score for August was 53.2.

The French manufacturing sector contracted more than initially estimated in August, final data from Markit showed Tuesday. The manufacturing Purchasing Managers' Index fell to 48.3 in August from 49.6 in July. This was below the flash score of 48.6 and was the lowest in four months.

British manufacturing expansion slowed in August, defying expectations for a modest improvement, survey figures from the Chartered Institute of Procurement & Supply and Markit Economics showed Tuesday. The purchasing managers' index fell to 51.5 from 51.9 in July. Economists had expected a score of 52.

U.K. mortgage approvals rose to a 17-month high in July, data from the Bank of England showed Tuesday. The number of mortgage approvals increased to 68,764 in July from 67,069 in June. It was the highest since February 2014, when it totaled 70,239 and also exceeded the expected level of 68,100.

Activity in the U.S. manufacturing sector unexpectedly grew at a slower rate in the month of August, according to a report released by the Institute for Supply Management on Tuesday, with the index of activity in the sector falling to its lowest level in over two years.

The ISM said its purchasing managers index dropped to 51.1 in August from 52.7 in July, although a reading above 50 indicates continued growth in the manufacturing sector. The decrease came as a surprise to economists, who had expected the manufacturing index to inch up to a reading of 52.8.

Reflecting a jump in spending on private construction, the Commerce Department released a report on Tuesday showing that total U.S. construction spending reached its highest level in seven years in the month of July.

The report said construction spending climbed 0.7 percent to an annual rate of $1.083 trillion in July from the revised June estimate of $1.076 trillion in June. Economists had expected spending to rise by 0.6 percent.