Chinese Factory Data Hits Miners and Banks

LONDON -- Stocks are seeing another day in the red in Europe this morning, under pressure as broader concerns about global economic recovery are made worse following weak factory output data in Asia overnight. The HSBC Flash China manufacturing purchasing managers' index showed that Chinese factory production has continued to slow, although the number itself saw a small uptick to 47.8 from 47.6 last month, sparking concerns that the world's largest economies may still not be ready to begin a full-scale recovery. With these concerns, money has been generally flowing away from riskier assets and into perceived safe havens today, with Spain's IBEX (INDEX: ^IBEX  ) one of the worst-performing indexes, down 1.1%.

As always, the following price moves are based on this morning's European trading.

The Chinese data has taken its toll across the board today, although mining and industrial producers are seeing some of the most severe losses amid concerns that slowing factory output will hit demand for raw materials. Combined with the broader concerns of its impact on the world economy, this has taken commodity prices deep into the red today, in particular those of base metals such as iron ore and copper. In turn, mining companies with high exposure to China or strong assets in the base-metal market have been the hardest-hit today, with Anglo American (NASDAQOTH: AAUKY.PK) leading losses, down almost 4%.

The Chinese data is also taking its toll on financial stocks today. After a much-needed boost by the U.S. Federal Reserve's QE3 announcement, banks are suffering. This profit-taking and consolidation of positions has taken a new lease on life today, thanks to the factory numbers. Naturally, those in Europe's periphery are seeing a lot of pressure -- even Spain's Banco Santander (NYSE: SAN  ) , which is down 1.5%.

Elsewhere, Italian tire-maker Pirelli (NASDAQOTH: PPASY.PK) is down 2.6%, having plummeted almost 3.5% at one point after analysts at Citigroup lowered their forecast for the company. Citigroup changed its recommendation from "buy" to "neutral," suggesting that the company is now "priced for perfect execution of its business plans going forward." The company, which is the fifth-largest tire-maker in the world, has seen a strong performance in its shares since the start of august, climbing almost 30% in that time.

On a more positive note, Coca-Cola Hellenic Bottling (NYSE: CCH  ) is up almost 3% in Athens today after it was included in the 2012 Dow Jones Sustainability Index for the fourth consecutive year. This lists the company as one of the world's top beverage companies in sustainability, being just one of four such companies in the index. This comes days after news that the company is looking at options for a stock listing on other exchanges, including a potential move to London as its primary listing -- a move that could see it enter the U.K.'s index of top 100 companies.

As always, this morning's European news saw some winners and losers -- and perhaps some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying the stock of a prominent European large cap.

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Karl Loomes does not own any share mentioned in this article. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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