Shares Lose Momentum After German PMI Data

LONDON -- European equity markets have pared earlier gains heading into the U.S. open, hit after German PMI data showed the seventh consecutive contraction in the private sector, and increasing fear the eurozone will slip back into recession. The markets saw an early boost Thursday after minutes from the latest Federal Open Market Committee meeting suggested the central bank will begin new stimulus measures soon if the economic picture does not begin to improve. This strength was short-lived and lacked commitment, however, with the German DAX (INDEX: ^GDAXI) now one of the best-performing indexes on the Continent, down just 0.4%.

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

Despite the early optimism surrounding economic stimulus, Spanish banks have been underperforming during the session, with Bankia (OTC: BNKXF) leading losses, down 7.7% after a report that the country's bank rescue fund would have the power to shut down firms that can't show they will be profitable within two years. The fund will first consider shutting down those banks already taken over by the state, although to what extent this will impact Bankia is uncertain as it is seen by many as being such a key part of the financial system.

Elsewhere, Dutch food retailer Koninklijke Ahold (OTC: AHONY) is seeing headlines as it falls 3.5% on the back of weaker-than-expected earnings results. Although the company saw improving profitability in its U.S. stores, this was more than offset by falling demand in its domestic market, with the underlying profit margin in the Netherlands falling to 5.4%, missing estimates of 6.1%. Despite this, net profit did just manage to beat estimates of 240 million euros, climbing 25% to 248 million euros.

On the upside, health care provider Rhoen-Klinikum (OTC: RKAGY) is up 6% amid speculation that Fresenius Medical Care is considering a takeover offer for the company. Fresenius' previous 3.1 billion euro bid failed to gain investor support after another hospital company, Asklepios Kliniken, bought a 5% share in Rhoen on the last day of the offer.

Elsewhere, Finnish phone maker Nokia (NYS: NOK) is seeing another day of gains, building on yesterday's performance and climbing over 2% today after news that Verizon Wireless will be selling the company's latest handset, which will be using the Windows 8 operating system, when it is released in early September. The company hopes the move will offer it a beachhead with the U.S. No. 1 wireless operator, where it has previously had a greater relationship with the country's second-largest operator, AT&T.

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.

If you want to know why Buffett has bought into Europe, this special Motley Fool report -- "The One European Share Warren Buffett Loves" -- reveals everything, including the price Buffett paid. You can download the report today for free. But hurry -- the report is available for a limited time only.

The Motley Fool is helping Europe invest. Better. And with the eurozone economy so uncertain, we're urging everyone to read "10 Steps to Making a Million in the Market" -- this report may transform your wealth. Click here now to request your free, no-obligation copy.

Further Motley Fool investment opportunities:

The article Shares Lose Momentum After German PMI Data originally appeared on

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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.