LONDON (ShareCast) - - PMIs disappoint from Eurozone and China
- S&P thinks Portuguese debt-restructuring is avoidable
- Banks lead the decline in Europe

Euro Stoxx 600: -0.11%
FTSE-100: -0.79%
Dax-30: -1.27%
Cac-40: -1.56%
FTSE MIB: -1.70%
IBEX: -1.62%

European stocks sank on Thursday after some weak manufacturing data from the Eurozone and China weighed on the outlook for the global economy. A fall in the number of initial weekly jobless claims in the US did little to help the mood as major benchmark indices across the continent dropped between 1.3 and 1.7 per cent.

The preliminary purchasing managers' index (PMI) for the Eurozone manufacturing sector, compiled by Markit Economics, has shown that the economy remains in recessionary territory. Both French and German PMIs hit four-month lows.

Chinese factory activity registered an even worse contraction in March as manufacturing hit a four-month low. The flash HSBC Manufacturing PMI for this month fell back to 48.1 from the 49.6 registered in February. This is its lowest level since last November.

In other news, Standard & Poor's head of sovereign ratings for Europe told BloombergTV that Portugal can avoid a debt restructuring as its debt level is lower than Greece's and the country has shown greater capacity to implement reforms.

The OECD sees the need for the Eurozone to create a one trillion euro safety net in order to stop the debt crisis contagion, according to a Swiss newspaper. Meanwhile, ECB President Mario Draghi said he feels the worst of the sovereign debt crisis has passed although the Eurozone governments need to take up the baton to deal with the risks that still exist.

EQUITIES

Banks were among the worst performers of the day with Banco Popolate Societa leading the decline in Milan, BBVA and Santander falling in Madrid and Commerzbank providing a drag in Frankfurt.

Spanish construction group OHL continues to strengthen its industrial business through acquisitions. This time, it has decided to acquire Spanish engineering company CSC, which specialises in communications and fire protection, Spanish daily Cinco Dias reported this morning. Shares fell slightly.

Spanish oil and gas group Repsol finished strongly after its Argentine subsidiary YPF has proposed to use its earnings to pay out a stock dividend that will amount to a capital increase.

Dutch financial services giant AEGON fell after agreeing to buy half of Liberbank Vida, the life insurance and pension of Spanish banking group Liberbank.

MACROECONOMY

Eurozone industrial orders data for the month of January showed a 3.3% month-on-month fall (Consensus: -3.0%).

The Eurozone manufacturing sector purchasing managers index for March retreated to 47.7 from 49 in February (Consensus: 49.5). The services sector PMI fell to 48.7 from 48.8 (Consensus: 49.2).

BC

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