European Markets Finished Mixed On Weak Economic Data

(RTTNews) - The European markets ended the first trading session of the new week with mixed results. The markets got off to a weak start, due to the weak Chinese service sector data and the weak performance of the Asian markets. Economic data from Europe was mixed Monday, as was the data released by the U.S. in the afternoon.

China's service sector growth slowed in December to the weakest level since August 2011 as new work inflow weakened, results of a survey by Markit Economics and HSBC showed Monday. The headline services business activity index came in at 50.9 in December, down from 52.5 in November.

The British government should cut spending by another GBP 25 billion over two years after the 2015 general election, Chancellor George Osborne said in a speech in Birmingham on Monday. The government needs to reduce spending by GBP 17 billion this year and GBP 20 billion next year.

According to the current forecasts, GBP 12 billion of further welfare cuts are needed in the first two years of next Parliament, he said.

"That's how to reduce the deficit without even faster cuts to government departments, or big tax rises on people," said Osborne.

"Even after we've reduced the amount we borrow each year, that still leaves us with a high debt from all the past borrowing," Osborne said.

"There is still a long way to go - and there are big, underlying problems we have to fix in our economy," he added.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.19 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.32 percent.

The DAX of Germany dropped by 0.08 percent and the CAC 40 of France tumbled by 0.47 percent. The FTSE 100 of the U.K. rose by 0.00 percent and the SMI of Switzerland gained 0.02 percent.

In Frankfurt, Lufthansa declined by 1.04 percent. Kepler downgraded the stock to ''Reduce'' from ''Hold.''

Dialog Semiconductor decreased by 4.75 percent. Morgan Stanley downgraded the stock to ''Underweight'' from ''Equalweight.''

Commerzbank rose by 3.50 percent, while Deutsche Bank added 0.52 percent.

In Paris, Sanofi finished up by 0.13 percent. JPMorgan downgraded its rating on the stock to ''Neutral'' from ''Overweight.''

In London, mining stocks turned in a weak performance, in response to weak data from China. Randgold Resources declined by 3.52 percent and Fresnillo lost 4.67 percent. Rio Tinto decreased by 3.09 percent and Antofagasta fell by 4.14 percent. Anglo American dropped by 1.70 percent and BHP Billiton tumbled by 1.56 percent.

UBS raised its price target on RSA insurance to 113 pence from 100 pence. The stock is surged by 6.24 percent. The Telegraph reported on Sunday that RSA's Irish unit will require no further writedowns.

Eurozone investor confidence improved sharply in January to the highest since April 2011, a monthly survey by the think tank Sentix showed on Monday. The sentiment index rose by 3.9 points to 11.9 in January.

Eurozone's private sector growth accelerated as estimated in December, supported by strong performance by the manufacturing sector, final data released by Markit Economics revealed Monday.

The seasonally adjusted composite output index, which measures performance of manufacturing and service sectors, rose to a three-month high of 52.1 in December from 51.7 in November. The outcome matched the flash estimates.

German private sector growth slowed more than estimated initially in December, detailed results of a survey by Markit Economics showed Monday. The headline composite output index, that measures combined performance of the country's manufacturing and services industries, fell to 55 in December from 55.4 in November. The flash survey report published on December 16 showed a higher reading of 55.2.

Germany's EU harmonized inflation weakened more-than-expected in December, latest data revealed Monday. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased by 1.2 percent in December from the corresponding month of last year, following a 1.6 percent gain in November. Economists had forecast a 1.4 percent growth for December.

The French service sector contracted less than estimated in December, final data from Markit Economics showed Monday. The final Services Activity Index fell to 47.8 in December, a 6-month low, from 48.0 in November. The flash reading for December was 47.4.

The U.K.'s service sector activity slowed unexpectedly in December as new order growth eased, a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed Monday. The headline business activity index fell to a six-month low of 58.8 in December from 60 in November. Economists had forecast the index to rise to 60.5.

Britain's corporate sector has turned more positive about the growth prospects of the developed world and sees fewer risks in the global economy, according to the latest Deloitte CFO survey. Optimism among Chief Finance Offices has risen for the fifth consecutive quarter and is now running close to a three-year high. At the same time, their perceptions of economic uncertainty continued to fall.

With orders for transportation equipment showing a notable rebound, the Commerce Department released a report on Monday showing that new orders for U.S. manufactured goods rose by slightly more than expected in the month of November.

The report said factory orders increased by 1.8 percent in November following a revised 0.5 percent decrease in October. Economists had expected orders to rise by 1.6 percent compared to the 0.9 percent drop that had been reported for the previous month.

Activity in the U.S. service sector unexpectedly grew at a slower rate in the month of December, according to a report released by the Institute for Supply Management on Monday.

The ISM said its non-manufacturing index edged down to 53.0 in December from 53.9 in November, although a reading above 50 still indicates growth in the service sector. With the drop, the index fell to its lowest level since hitting 52.8 in June. The modest decrease came as a surprise to economists, who had been expecting the index to creep up to a reading of 54.8.