European stocks drop despite bright GDP

LONDON: Europe's main stock markets mostly fell Tuesday on downbeat Chinese data, and despite news that the eurozone economy grew more than anticipated in the first quarter.

Sentiment was rocked by news of a below-forecast reading on factory activity in China.

The European single currency edged upwards but most markets were also preoccupied with disappointing US technology results including Google-parent Alphabet.

Activity in China's factories barely grew last month, indicating the world's number two economy continues to struggle. The reading comes after a surprise jump last month that had fuelled hopes of stabilisation.

The news weighed in Asia alongside poor tech sector earnings, although Shanghai rose as investors fished for bargain shares.

"Today's latest macro data has painted a mixed picture about the health of the global economy, causing (most) stocks to fall in Asia overnight with Europe also starting on the back foot," said Forex.com analyst Fawad Razaqzada.

"It comes after the latest Purchasing Managers' Indices (PMIs) from China's manufacturing and services sectors disappointed expectations, casting fresh doubts over the world's second largest economy.

"However, there was some positive news out of the eurozone, where the economy expanded at a slightly faster pace than expected."

In afternoon deals, London stocks were down 0.4 percent. Elsewhere, Paris shed 0.4 percent and Frankfurt slid 0.2 percent.

Milan's stock market however gained 0.2 percent on welcome news that Italy has emerged from recession.

The overall eurozone economy expanded by a better than forecast 0.4 percent in the first quarter, official data showed Tuesday, dampening talk of a looming recession in Europe.

The figure exceeded the expectations of analysts interviewed by data company Factset that forecast 0.3 percent growth.

- Tech selloff -

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In Asia, tech firms also took a hit as two of the biggest names in the sector posted disappointing earnings, dampening sentiment on markets in the region.

Alphabet reported a 29-percent drop in quarterly earnings on slower-than-expected revenue growth after US markets closed.

Google shares fell around 8 percent when trading started in New York.

Meanwhile smartphone and chip titan Samsung Electronics said Tuesday morning its operating profit plunged a worse-than-expected 60.2 percent in January-March as sales also tumbled.

The release of Apple's results later in the day will be nervously watched by the market with some observers suggesting a weak reading could spark more heavy selling. The Dow edged up 0.2 percent in opening trading, but the tech-heavy Nasdaq slid 0.7 percent.

- Key figures around 1330 GMT -

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London - FTSE 100: DOWN 0.4 percent at 7,408.08 points

Frankfurt - DAX 30: DOWN 0.2 percent at 12,301.16

Paris - CAC 40: DOWN 0.4 percent at 5,561.45

Milan - FTSE Mib: UP 0.2 percent at 21,839.57

EURO STOXX 50: DOWN 0.2 percent at 3,495.41

New York - Dow: DOWN 0.2 percent at 26,598.80

Hong Kong - Hang Seng: DOWN 0.6 percent at 29,702.03 (close)

Shanghai - Composite: UP 0.5 percent at 3,078.34 (close)

Tokyo - Nikkei 225: closed for holiday

Euro/dollar: UP at $1.1220 from $1.1186 at 2100 GMT Monday

Pound/dollar: UP at $1.3030 from $1.2937

Dollar/yen: DOWN at 111.38 from 111.65

Oil - Brent Crude: UP 97 cents at $73.01 per barrel

Oil - West Texas Intermediate: UP 79 cents at $64.29