05/03/2012 12:00 - European stocks down as China cuts economic growth forecast
On Monday European stocks dropped, snapping a two-day gain, as China cut its economic growth forecast and data showed manufacturing and services shrank more than estimated in the euro area. U.S. index futures and Asian shares also fell.
BP Plc advanced 2 percent after reaching a $7.8 billion settlement with the victims of 2010’s Gulf of Mexico oil spill.
The Stoxx Europe 600 Index retreated 0.8 percent to 265.21 at in London, paring last week’s 0.9 percent advance. The benchmark measure has rallied 8.5 percent this year.
China reduced its growth target to 7.5 percent this year, the lowest goal since 2004, according to a transcript of Premier Wen Jiabao’s address to the National People’s Congress. The government will also aim for inflation of about 4 percent this year, unchanged from its goal in 2011.
Stocks extended declines after euro-area services and manufacturing output shrank in February more than economists had estimated as the region’s economy struggled to rebound from a contraction in the fourth quarter of last year.
Investors are waiting to see how many of Greece’s private creditors agree to write down their debt by the March 8 deadline. Greece’s government has set a 75 percent participation rate as the threshold for proceeding with the transaction, in which investors will forgive 53.5 percent of their principal and exchange their remaining holdings for new Greek government bonds and notes from the European Financial Stability Facility.
The Nikkei 225 Stock Average retreated from a seven-month high as a strengthening yen clouded the earnings outlook for exporters to Europe and falling oil prices weighed on energy companies.The Nikkei 225 fell 0.8 percent declining after the gauge rose last week to its highest level since the 2nd August. The broader Topix lost 0.6 percent.
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