Europe Down on Weak Manufacturing Data, Nokia Disappoints

Lucy Stoeva
01 Feb, 2016
New York City

European markets edged down on weak manufacturing data from China and the euro zone, disappointing news from Nokia, and the decline in oil prices. BT Group

[R]4:00 PM European markets edged down on weak manufacturing data from China and the euro zone, disappointing news from Nokia, and the decline in oil prices. BT Group’s third quarter pre-tax profit surged 24%. Vallourec SA plans to raise €1 billion for restructuring after the slump in oil prices.[/R]

European stocks eased down on Monday on weak manufacturing data from China and the euro zone, disappointing news from Nokia, and the end of the rally in oil prices.

In China, January manufacturing data fell to the lowest level since 2012. The Purchasing Managers'' Index was 49.4 in January, compared with 49.7 in December.

International oil prices, which heavily depend on demand from China in the environment of oversupply, headed south again.

Brent crude oil futures plunged 5% to $34.19, while West Texas Intermediate crude oil fell 6.1% to $31.57.

In the euro zone, manufacturing PMI fell to 52.3 in January from December’s 53.2. The data indicates slower growth but is still above the 50 mark, which separates growth from contraction.

Nokia plummeted 11% after investors deemed the latest patent dispute settlement with Samsung disappointing.

In London, FTSE 100 index fell 23.69, or 0.30%, to 6,060.10 and in Germany, the DAX index declined 40.23, 0.41%, to 9,757.88.

In Paris, the CAC 40 index shed 24.96, or 0.56%, to 4,392.33.

BT Group Plc gained 1.93% to 494 pence after the British telecom reported profit-before-tax surged 24% to £862 million in the third quarter ending in on December 31, 2015.

Revenues in quarter grew 4.7% to £4.59 billion from a year ago, mainly due to customer growth in broadband, TV and mobile in continental Europe and Asia.

CEO Gavin Patterson said BT Group increased its overall customer base for the first time in more than a decade and captured 71% of new broadband customers.

The company also announced changes in its corporate structure following the acquisition of mobile services brand EE.

Luxottica Group SpA dropped 5.7% to €54.25 after Adil Khanas, co-CEO of the Italian cosmetic company, abruptly resigned after only 17 months in the position.

Bankia SA gained 2.19% to 93 euro cents after the state-owned Spanish bank reported fourth-quarter net swung to €185 million profit from €50 million loss a in a quarter a year earlier.

The Spanish bank, which received €22 billion state aid in 2012, is increasing capital and reducing non-performing loans to repair the balance sheet.

Bankia’s bad-loan ratio declined to 10.8% from 11.4% in the previous quarter.

It announced a dividend of €302.3 million for 2015 after paying out €202 million for 2014.

The government plans to sell its stake in the bank.

Banco Popolare SC surged 6% to €9.03 after CEO Pier Francesco Saviotti said he expected an agreement on the merger with Banca Popolare di Milano within a month.

The deal will create the third-largest Italian bank.

Vallourec SA jumped 7.7% to €4.36 after the French maker of steel tubes for the oil industry announced plans to raise €1 billion euros through bond and stock offerings.

The state-owned fund Bpifrance and Japan’s Nippon Steel & Sumitomo Metal Corp. will own 15% of Vallourec after the bond deal.

The funds are necessary for restructuring the company after the sharp decline in crude oil prices.

Vallourec will not pay a dividend for 2015 and plans to cut European production capacity by half by 2017.

Shares of the company fell sharply on Friday and were under a trading halt on Monday morning.