European stocks sluggish on manufacturing data

European stock markets mostly fell on Monday, making a downbeat start to the week as investors were put off by shrinking manufacturing activity in France and Spain.

London's benchmark FTSE 100 index slid 0.70 percent to 6,604.21 points in afternoon deals, Frankfurt's DAX 30 edged up 0.05 percent to 9,409.74 points and in Paris the CAC 40 reversed 0.34 percent to 4,280.79 compared with Friday's closing levels.

Madrid's IBEX 35 declined by 0.82 percent to 9,757.40 points.

"Disappointing Spanish manufacturing PMI figures have dragged European markets lower, overshadowing any positive sentiment mustered by reports of an improving Chinese economy," said Alastair McCaig, analyst at IG.

"Spanish figures are now contracting rather than showing improving growth as expected, raising fears of a domino-like contagion," he said.

Overall manufacturing activity in the 17-nation eurozone last month grew at its fastest pace since June 2011, according to a poll by data firm Market.

The monthly purchasing managers index -- based on a survey of 3,000 manufacturing firms in eight eurozone countries -- rose to 51.6 from 51.3 in October. A reading above 50.0 indicates an expansion in activity.

But the readings for France and Spain showed contraction in November.

"France is actually becoming the bigger concern, having failed to record a figure above 50, the number that separates growth from contraction, since July 2011," said Alpari analyst Craig Erlam.

The data knocked investor confidence in Spain, and comes after official data showed last week that the nation's economy escaped a two-year recession with feeble 0.1-percent growth in the third quarter.

In foreign exchange activity, the European single currency fell to $1.3549 from $1.3587 late in New York on Friday. The dollar meanwhile rose to 103.04 yen from 102.40.

On the London Bullion Market, the price of gold fell to $1,229.50 an ounce from $1,253 on Friday.

In company news, ArcelorMittal gained 1.34 percent to 12.85 euros on news that the group was partnering with Nippon Steel and Sumimoto Metal to buy a US steel plant from Germany's ThyssenKrupp.

The sale, as well as an announcement of a quarterly loss, sent shares in ThyssenKrupp plummeting 8.46 percent to 17.63 euros.

L'Oreal rose 1.71 percent to 125.25 euros after announcing a stock buyback programme for up to 500 millions euros.

Wall Street was steady in midday trade Monday with the Dow Jones Industrial Average down 0.09 percent and the tech-heavy Nasdaq off 0.16 percent.

Asian equity markets mostly fell, with Tokyo hit by profit-taking, while Shanghai slid on expectations China will restart initial public offerings in the new year, raising fears of a share glut.

Tokyo ended flat, edging down 6.80 points, to 15,655.07, a second successive loss after hitting a near six-year high on Thursday.

Shanghai lost 0.59 percent but Hong Kong was up 0.66 percent.

HSBC meanwhile said Monday that its index of manufacturing activity in China came in above forecasts for November.

The banking giant said its China PMI sat at 50.8 last month, which while down from 50.9 in October is much better than the 50.4 initially estimated on November 21.