EUROPE MARKETS: European Stocks Drop After Weak German Production Data

By Sara Sjolin, MarketWatch

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

The Stoxx Europe 600 index dropped 0.3% to 346.99, after closing out last week with the biggest weekly advance since March.

Germany's DAX 30 index fell 0.1% to 9,995.92, while France's CAC 40 index gave up 0.3% to 4,454.21. The U.K.'s FTSE 100 index slipped 0.2% to 6,855.24

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.

Among notable movers in Europe, shares of Sky Deutschland AG dropped 3.1% after Nomura cut the cable-TV company to neutral from buy, according to Dow Jones Newswires.

SABMiller PLC slipped 0.6% 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.

On a more upbeat note, PostNL NV surged 16% after the Dutch postal company raised its full-year guidance following a strong mail performance in the Netherlands.

Shares of Banco Espirito Santo SA climbed 2.1% after the bank said on Saturday that shareholders had chosen the current head of Portugal's debt agency to become its chief financial officer.

Also on the rise, shares of Renault SA gained 2.5% after the French car maker said first-half sales rose 4.7% from the same period a year earlier.

Deutsche Lufthansa AG picked up 1% after the German carrier said it has signed a memorandum of understanding with Chinese flag carrier Air China Ltd. to expand the scope of the commercial partnership between the two airlines.

Tele2 AB advanced 2% after the Swedish telecom operator said 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).

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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