Weak German PMI data send shares, euro into reverse
By Marc Jones
LONDON (Reuters) - Weaker-than-expected European economic data sent the region's shares and the euro into reverse on Friday, as hopes of a quick recovery by the struggling bloc were left looking fragile.
Disappointing German manufacturing sector figures overshadowed a small pick-up in the wider euro zone purchasing manager index, data which polls around 5,000 businesses across the 17-nation bloc and is viewed as a reliable growth indicator.
The German manufacturing sector slipped to 46.3 in December from 46.8 the previous month, remaining well below the 50 threshold that divides growth from contraction and missing the consensus forecast in a Reuters poll for 47.2.
It saw European shares .STOXX50E drop back to a near-flat 2628.56 points. By 4:30 a.m. ET London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI were down between 0.1 and 0.2 percent having all opened in positive territory.
"All in all, the picture for the EMU (euro zone) economy has not changed much after today's data," said Annalisa Piazza, an economist at Newedge Strategy.
"EMU GDP is expected to continue to contract in Q4-12 and there are no signs of improvement for the first part of next year."
Following a mixed session for Asian equities, the MSCI index of global stocks .MIWD00000PUS was down fractionally at 336.73 points, following a 6 percent rise over the last three weeks.
In the currency market, the PMI data also saw the euro lose its early momentum and slide back below $1.31. Continued...