EUROPE MARKETS: European Stocks Slide After Weak German Production Data

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stocks retreated on Monday after a surprisingly steep drop in German industrial production data sparked worries that Europe's economic engine is losing steam.

The Stoxx Europe 600 index dropped 0.9% to close at 344.80, after finishing last week with the biggest weekly advance since March.

Germany's DAX 30 index slumped 1% to 9,906.07, while France's CAC 40 index gave up 1.4% to 4,405.76. The U.K.'s FTSE 100 index slid 0.6% to 6,823.51.

The losses came after data showed industrial production in Germany dropped 1.8% in May, marking the biggest monthly slide since April 2012. That is well below expectations of a flat rate for May in a survey of economists by The Wall Street Journal.

That followed a report on Friday that showed German manufacturing orders fell 1.7% in May, also weaker than expected, while softer-than-forecast unemployment data out last week further raised red flags.

Steen Jakobsen, chief economist at Saxo Bank, has expressed concerns about Germany's robustness and said the country could hit zero economic growth by the first quarter of 2015. See more in our Need to Know blog.

Movers

Among notable movers in Europe, shares of Sky Deutschland AG dropped 4.1% after Nomura cut the cable-TV company to neutral from buy, according to Dow Jones Newswires.

SABMiller PLC slipped 1.3% as the brewer said it plans to sell its 40% stake in African hotel and casino group Tsogo Sun Holdings Ltd. for around $1.09 billion.

Swiss insurer Helvetia Holding AG lost 1.2% after the company said it has agreed to buy a majority stake in Nationale Suisse, offering shareholders 80 Swiss francs ($89) per National Suisse share.

On a more upbeat note, PostNL NV surged 19% after the Dutch postal company raised its full-year guidance following a strong mail performance in the Netherlands.

Also on the rise, Tele2 AB advanced 1.8% after the Swedish telecom operator said it will sell its mobile unit in Norway to rival Swedish telecom company TeliaSonera AB for a cash value of 5.3 billion Swedish kronor ($773.9 million). TeliaSonera ended 1.9% higher.

Trading in Gowex SA shares was halted for a third day after the Spanish wi-fi provider said on Sunday it had filed for bankruptcy protection after the company's chairman acknowledged falsifying accounts and resigned.

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