Ukraine tensions, Chinese data sour sentiment

Mon May 5, 2014 5:40am EDT
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By Catherine Evans

LONDON (Reuters) - European stocks slipped in thin trade on Monday after soft Chinese manufacturing data, while simmering tensions in Ukraine underpinned safe-haven government bonds and gold.

Portuguese bond yields edged to eight-year lows after Lisbon said on Sunday the country would make a clean exit from its bailout later this month.

Volumes were thinned by the closure of markets in London and Tokyo for public holidays.

At 0848 GMT (4.48 a.m. EDT), the euro zone's blue-chip Euro STOXX 50 .STOXX50E index was down 1.36 percent at 3,134.55 points, after a survey showed activity in China's manufacturing sector contracted for a fourth consecutive month in April.

That added to signs the world's second-largest economy is still losing momentum and knocked Asian shares overnight.

"The crisis between Russia and Ukraine and the sluggish Chinese data which confirm a slowdown in growth are the two big negative catalysts for markets," said Lionel Jardin, head of institutional sales at Assya Capital in Paris.

"The only thing that prevents stocks from a bigger drop is this week's European Central Bank meeting and the hope that new measures could be unveiled."

MSCI's world equity index .MIWD00000PUS, which tracks shares in 45 countries, was 0.21 percent lower at 413.86.   Continued...

A man looks at an electronic board displaying Japan's Nikkei average (top C) and various countries' stock indices, as passers-by walk past outside a brokerage in Tokyo April 16, 2014. REUTERS/Toru Hanai