EUROPE MARKETS: European Stocks Slide, But Log Best Quarter In Years

By Sara Sjolin, MarketWatch

DAX scores 22% gain for the quarter

LONDON (MarketWatch) -- European stock markets moved firmly lower on Tuesday, with investors pegging the slide to traders using disappointing eurozone unemployment data as an excuse to bank gains after the best quarter in years.

"We've had a good run in Europe, so we're seeing some book squaring after a good quarter," said Michael Hewson, chief market analyst at CMC Markets. "Investors are using the unemployment data as en excuse to take profits."

After a volatile trading day, the Stoxx Europe 600 index dropped 0.6% to close at 397.30. The index traded as high as 401.75 earlier in the day, but started to pare gains after the arrival of a mixed bag of eurozone economic reports.

The eurozone inflation rate improved in March to negative 0.1% from negative 0.3% the previous month, easing fears of deflation (http://www.marketwatch.com/story/eurozone-deflation-fears-ease-as-price-fall-slows-2015-03-31) in the currency union. But eurozone unemployment for February came in at 11.3%, higher than the forecast of 11.2%.

January's joblessness rate was raised to 11.4%, from 11.2%.

For the quarter, the pan-European benchmark jumped 16%, marking its best quarterly gain since the 17.8% rally logged in the third quarter of 2009.

Other markets: Germany's DAX 30 index fell 1% to 11,966.17 on Tuesday, shaking off an earlier boost it got from German labor data. That report showed unemployment dropped to a record low of 6.4% in March, down from 6.5% in February.

For the quarter, the benchmark scored a 22% rise, the strongest quarterly gain since the second quarter of 2003.

Read: Germany's DAX logs best quarter in more than a decade (http://www.marketwatch.com/story/germanys-dax-logs-best-quarter-in-more-than-a-decade-2015-03-31)

France's CAC 40 index erased 1% to 5,033.64, trimming its quarterly advance to 17.8%.

The U.K.'s FTSE 100 index tanked 1.7% to 6,773.04 ahead of the May 7 general election. Read: FTSE drops but stays on track for best quarter in more than a year (http://www.marketwatch.com/storyno-meta-for-guid)

Read: Stocks to watch with U.K. election just weeks away (http://www.marketwatch.com/story/be-wary-of-these-uk-stocks-ahead-of-general-election-fund-managers-say-2015-03-30)

Data: France reported that consumer spending for February rose 0.1% on the month (http://www.marketwatch.com/story/french-consumer-spending-rises-in-february-2015-03-31-34855936) and 3% on the year, bang in line with forecasts by economists polled by The Wall Street Journal.

The U.K. economy grew at a faster-than-expected pace in 2014, confirming that the country was the top growth performer in the Western world (http://www.marketwatch.com/story/uk-top-performing-in-west-as-2014-gdp-revised-up-2015-03-31) last year. Gross domestic product for the full year was raised to 2.8%, from 2.6% reported previously.

Greece reform impasse: The antiausterity government in Athens and Greece's international lenders were still struggling to reach a reform agreement, which is needed to unlock the next tranche of bailout funds for the struggling country. Reuters reported that the negotiations between the two sides ended on Tuesday without a dea (http://www.marketwatch.com/story/greek-bailout-revision-talks-end-without-deal-report-2015-03-31)l on revised reforms, while European Council President Donald Tusk warned it could take until the end of April (http://www.theguardian.com/business/live/2015/mar/31/euro-falls-greek-progress-unemployment-inflation-live-updates) before a deal is brokered.

Greek Prime Minister Alexis Tsipras told Greece's parliament late Monday they wouldn't give in unconditionally to the economic overhauls demanded by its creditors. Greece is at risk of running out of cash in April unless it receives fresh funding. Read: Super-bull Mark Mobius: Greece is so cheap right now, we're already buying (http://www.marketwatch.com/story/super-bull-mark-mobius-greece-is-so-cheap-right-now-were-already-buying-2015-03-31)

Movers: Shares of Kingfisher PLC jumped 4.3% after the do-it-yourself retailer said it would close about 60 stores in its U.K. chain B&Q (http://www.marketwatch.com/story/kingfisher-net-profit-falls-will-close-stores-2015-03-31)and its "few loss-making stores" in Europe.

Raiffeisen Bank International AG climbed 5.9% after J.P. Morgan Cazenove lifted the Austrian lender to overweight from neutral.

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