European Markets Reversed On Energy Weakness

(RTTNews) - The European markets were up in early trade Monday. Investor sentiment received a boost from the better than expected Chinese data released over the weekend and the faster than expected recovery in Eurozone industrial production. However, continued weakness in crude oil prices pulled the markets into negative territory in the afternoon, where they remained until the close.

Investors are also exercising caution ahead of the Federal Reserve announcement on Wednesday. The Fed is widely expected to raise interest rates when it concludes its 2-day policy meeting. Traders will be paying close attention to the accompanying statement for clues about the outlook for further rate hikes.

European Central Bank President Mario Draghi said inflation is expected to return to target without undue delay.

If the ECB had to intensify the use of its instruments to ensure that it achieves its price stability mandate, it would, Draghi said in Bologna, Italy on Monday.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 2 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.82 percent.

The DAX of Germany dropped 1.94 percent and the CAC 40 of France fell 1.68 percent. The FTSE of the U.K. declined 1.32 percent and the SMI of Switzerland finished lower by 1.49 percent.

In Frankfurt, RWE dropped 4.29 percent and E.ON fell 3.98 percent.

Volkswagen declined 4.12 percent and BMW lost 2.35 percent. Daimler also finished lower by 2.25 percent.

In Paris, Peugeot weakened by 2.97 percent and Renault surrendered 2.66 percent. Car parts maker Valeo also closed down by 2.61 percent.

Total decreased 2.92 percent and Technip fell 1.98 percent.

In London, insurer Old Mutual climbed 1.35 percent after South Africa got a new finance minister. The insurer generates most of its revenue in South Africa.

BG Group dipped 0.68 percent after its proposed combination with Royal Dutch Shell gained anti-trust approval in China.

BP dropped 2.57 percent and Royal Dutch Shell declined 2.41 percent. Tullow Oil also weakened by 4.70 percent.

Mining stocks were also under pressure due to falling commodity prices. Glencore tumbled 6.29 percent, Antofagasta fell 3.87 percent and BHP Billiton lost 3.59 percent. Anglo American surrendered 4.15 percent after S&P put the outlook on its rating to CreditWatch Negative.

Eurozone industrial production recovered at a faster than expected pace in October on durable consumer goods output, official data showed Monday.

Industrial output advanced 0.6 percent on a monthly basis in October, reversing a 0.3 percent fall in September, Eurostat reported. This was the first increase in three months and exceeded a 0.3 percent rise forecast by economists.

British house prices dropped for the second successive month in December, the latest house price balance from property tracking website Rightmove showed on Monday. The house price index fell 1.1 percent month-over-month in December, which was the smallest decrease since 2006. In November, prices had fallen 1.3 percent.

China's industrial production and retail sales data released over the weekend signaled that economic momentum is picking up in the fourth quarter.

Figures from the National Bureau of Statistics showed that industrial production growth accelerated to a 5-month high of 6.2 percent in November from 5.6 percent in October, exceeding the consensus estimate of 5.7 percent.

Likewise, retail sales advanced 11.2 percent annually after rising 11 percent in the prior month and was better than the 11.1 percent growth forecast by economists.