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European stocks drop, Asia mixed after new PMI data

LONDON/HONG KONG--European stock markets fell on Monday as traders reacted to a further drop in eurozone business activity that offset positive news for Chinese manufacturing, analysts said.

London's FTSE 100 index of top companies slipped 0.27 percent to stand at 6,806.72 points approaching midday in the capital.

Frankfurt's DAX 30 lost 0.35 percent to 9,952.11 points and the CAC-40 in Paris shed 0.34 percent to 4,525.72 compared with Friday's closing levels.

Milan slumped 1.08 percent and the Madrid market gave up 0.16 percent.

“Weaker PMI (Purchasing Manager Index) figures from Europe have stymied any chance of an early bounce for European markets, and have cancelled out some of the good news from China, where the manufacturing PMI moved into expansion territory for the first time this year,” said Alastair McCaig, market analyst at IG traders.

“Miners have been in demand this morning thanks to the (Chinese) news, which has gone some way to leaving the FTSE as the relative outperformer.”

BHP Billiton won 2.0 percent to 1,939.75 pence and Rio Tinto gained 1.87 percent to 3,135 pence.

Eurozone business activity slipped for the second month running in June, suggesting a modest recovery could be stalling, a closely watched survey showed on Monday.

Markit Economics said its Eurozone Composite PMI for June, a leading indicator of overall economic activity, slipped to 52.8 points from 53.5 in May, coming in at the weakest level since December.

HSBC PMI Positive, Mini-Stimulus May Be Working

Asian shares were mixed Monday, with positive Chinese manufacturing figures boosting morning markets until profit-taking sent Hong Kong and Shanghai into the red in the afternoon.

The early PMI figures from banking giant HSBC added to an upbeat morning for the region, which was already in positive territory after another record close on Wall Street.

Tokyo extended a recent uptrend, adding 0.13 percent, or 19.86 points, to end at 15,369.28. Sydney gained 0.62 percent, or 33.8 points, to 5,453.3 and Seoul rose 0.35 percent, or 6.85 points, to 1,974.92.

However, Hong Kong tumbled 1.68 percent, or 389.25 points, to 22,804.81 and Shanghai closed down 0.11 percent, or 2.31 points, at 2,024.37 as dealers took their cash off the table following initial advances.

HSBC said early results showed its PMI of Chinese manufacturing came in at 50.8 this month, up from a final reading of 49.4 in

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