Europe open: Stocks mostly lower on weak Chinese PMI

LONDON (ShareCast) - European equities were mostly lower as Chinese manufacturing data came in weaker than expected, though it did boost hopes of further stimulus measures. HSBC's purchasing managers' index (PMI) on Chinese manufacturing activity fell to 49.2 in April from 49.6 a month earlier, surprising analysts' who had expected it to remain unchanged. A reading below 50 signals a contraction while a level above signals expansion.

"We have argued that much of the weakness in the March data - including HSBC/Markit (NasdaqGS: MRKT - news) 'smanufacturing PMI - was caused by seasonal distortions due to the unusually late timing of Chinese New Year," said Julian Evans-Pritchard, China economist at Capital Economics.

Markit's Eurozone manufacturing PMI fell to 51.9 in April from 52.2 in March, compared to predictions of 52.6. The services PMI also fell to 53.7 from 54.2, missing estimates of 54.5.

The UK at 09:30 BST sees the release of retail sales data which is expected to show a 0.5% increase in March after a 0.7% rise a month earlier. In afternoon trade, US reports including new home sales, manufacturing PMI, and initial jobless claims will be released.

Developments in Greece will continue to be under watch as Prime Minister Alexis Tsipras meets with German Chancellor Angela Merkel later on Thursday in Brussels. European Commission Vice President Valdis Dombrovskis has stated that a Greek deal isn't likely until May.

"By kicking the Grexit can down the road a bit, some of the recent market uncertainty may be removed; however, not all of it," said Connor Campbell, financial analyst at Spreadex.

"There is still the issue of how Greece will fund itself beyond the initially proposed 30 April deal-deadline, especially since the cash-unlocking reforms list Athens needs to provide is nowhere to be seen. The only good news for Greece is that the Eurozone looks like it is trying to bend as far as it can before breaking to ensure the country doesn't leave the currency union any time soon." Euro-area finance ministers meet in Riga, Latvia, on Friday to discuss Greece. Thomas Wieser, who heads the Eurogroup Working Group, has said Athens will not present a list of economic reforms at the meeting.

The euro was down 0.37% to $1.0685 in morning trade.

Michelin (Paris: FR0000121261 - news) & Cie., Pernod Ricard SA rally on quarterly results Michelin & Cie. and Pernod Ricard SA advanced after reporting an increase in quarterly sales.

Logitech International SA (NasdaqGS: LOGI - news) gained after the Swiss maker of computer mice posted a rise in annual profit.

Ericsson AB slumped after the network-equipment maker's first-quarter profit fell short of forecasts.

Bilfinger dropped after reducing its annual profit guidance due to low demand at its power and oil and gas businesses.

Brent crude fell 0.57% to $62.37 per barrel at 09:10 BST and West Texas Intermediate dipped 0.51% to $62.37.