European stocks sink in grey start to week

Europe's stock markets fell Monday in a poor start to the week, hit by economic gloom and growing doubts over new eurozone stimulus, dealers said.

Frankfurt, London and Paris stocks were down just over of one percent, one day after the Bank of International Settlements (BIS) warned of a "gathering storm that has been building for a long time" on global markets.

The region's markets had rallied Friday as new data showed strong US jobs figures but a fall in wages, fuelling talk of more Federal Reserve rate hikes.

"Dampening spirits from the off, a warning from the BIS that there is a 'gathering storm' of macro-maladies ready to plague the markets did nothing to ensure last week's rebound continued," said Spreadex analyst Connor Campbell on Monday.

"Especially notable is the BIS comment that investors are fearful that the world's central banks are running out of options -- something that does not bode well for Thursday?s ECB (European Central Bank) meeting."

Investors are increasingly uncertain over whether the ECB will deliver new stimulus moves when it reveals its latest monetary policy decision later this week.

- Lack of ECB unity? -

"Reports last week that there is a lack of unity within the ECB over potential new monetary stimulus measures has removed some of the appetite for stocks on the continent," noted analyst Jasper Lawler at traders CMC Markets.

Shares in EDF were a top loser in European trading, falling around 6.6 percent to 10.13 euros after the French energy giant's financial chief quit over its £18-billion (23.2-billion-euro, $25.5 billion) plan to build a next-generation nuclear plant at Hinkley Point in southwestern Britain.

While Brent oil prices struck a three-month high at $39.50 a barrel, shares in European oil majors fell, with BP down 2.7 percent in afternoon trading to 357.95 pence, Royal Dutch Shell's A share losing 2.0 percent to 1,644 and Total giving up 1.5 percent to 42.05 euros.

Asian energy firms had been among the biggest gainers as oil continued its recovery thanks to the jobs data and as US producers cut the number of rigs in operation to combat a global supply glut that has hammered prices.

In contrast to Europe, Asian stocks began the week in buoyant mood, cheering a strong pick-up in US job creation while weighing China's weekend decision to lower its growth target but expand spending.

At the start of its annual policy congress Saturday China set a target of 6.5-7.0 percent expansion this year -- as expected -- as it tries to combat a slowdown in global trade and to transition from dependence on exports and investments to consumer-led growth.

But in a two-hour speech, Premier Li Keqiang promised to loosen the money belt and projected the biggest budget deficit in several decades, putting on the back-burner its drive to combat bulging government debt.

He also pledged reform of state-owned enterprises, many of which are plagued by inefficiencies and overcapacity.

China's leaders have sought to reassure jittery global markets in recent weeks with a unified message that authorities still have the tools to keep the economy -- a key driver of world growth -- from a further slowdown.

Shanghai stocks ended up 0.8 percent, with investors also cheered by an expected delay in a plan to speed up initial public offerings.

Wall Street stocks opened lower Monday, pausing from the rally of the last three weeks, with the Dow slipping 0.3 percent after five minutes of trading.

- Key figures around 1430 GMT -

London - FTSE 100: DOWN 1.0 percent at 6,136.56 points

Frankfurt - DAX 30: DOWN 1.0 percent at 9,724.08

Paris - CAC 40: DOWN 1.0 percent at 4,410.73

EURO STOXX 50: DOWN 1.2 percent at 3,000.10

New York - Dow: DOWN 0.3 percent at 16,961.36

New York - S&P 500: DOWN 0.4 percent at 1,991.59

New York - Nasdaq: DOWN 0.5 percent at 4,305.70

Tokyo - Nikkei 225: DOWN 0.6 percent at 16,911.32 (close)

Shanghai - composite: UP 0.8 percent at 2,897.34 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 20,159.72 (close)

Euro/dollar: DOWN at $1.0955 from $1.1008 on Friday

Dollar/yen: DOWN at 113.59 yen from 113.79 yen