European Manufacturing And Services Miss Expectations In February

Mixed and cautious trading dominated the market with the start of the session today as investors are still weighing the Greek second bailout package and the European Central Bank's unclear role in fighting back the debt crisis. However, the sentiment deteriorated and negativity spread in the market after the downbeat German manufacturing and services, which unexpectedly retreated in February.

Germany started the session today with the purchasing managers' advanced indexes for manufacturing and services, where the PMI manufacturing index declined in February to 50.1 from 51.0, below expectations of 51.5, noting that the decline in manufacturing was led by the declining orders at German factories.

Furthermore, the PMI services also retreated in February, where the index slumped to 52.6 from the previous of 53.7, missing median estimates of 53.9.

The European common currency and the German DAX retreated sharply after the news, where the European common currency is trading now around 1.3220, compared with the opening level of 1.3229 and the highest level of 1.3263.

The German DAX shed 0.31% after the news reaching 6886.87 point in total, led by the consumer services and basic material sectors, where both sectors cut 1.70% and 0.71% respectively.

The sentiment deteriorated further after data released showed that the euro-area region manufacturing and services sectors also retreated in February, where the euro zone manufacturing sector remained contracted in the month, advancing in a slower than expected pace to 49.0 from 48.8.

The services sector however unexpectedly contracted to 49.4 from the previous of 50.4, accordingly the PMI composite contracted as well to 49.7 from 48.8.

The second largest economy in the euro zone also released weak manufacturing and services fundamentals today, where the French manufacturing sector expanded to 50.2 from 48.5, yet the services sector approached contraction, after it retreated to 50.3 from 52.3.

As of 03;55 EST, the French CAC 40 was 0.06% or 1.33 points lower, trading currently around 3463.21 point, erasing all the gains recorded earlier, led by the utilities which shed so far 1.17%. On the other hand, industrials gained the most adding 1.56% after the cheerful manufacturing data.