European stocks drop on China strains, Ukraine tension

Europe's main stock markets fell Wednesday on fresh concerns over Chinese growth and after a rollercoaster start to the week caused by the crisis in Ukraine. London's benchmark FTSE 100 index dropped 0.71 percent to close at 6,775.42 points, with the heavyweight mining sector knocked by unease over China, traders said. Frankfurt's DAX 30 slid 0.49 percent to 9,542.02 points, and in Paris the CAC 40 dipped 0.11 percent compared with Tuesday's closing values to 4,391.25. "UK markets have taken a turn for the worse ... after more news from China and a number of disappointing updates weighed on the benchmark," said CMC Markets trader Toby Morris. "China re-affirming a 7.5-percent growth target should be good news on recent form, but analysts have cast doubt over whether that is achievable... The lack of clarity has weighed on basic resources which is one of the worst performing sectors." Among the fallers were mining giants. Shares in Anglo-Australian Rio Tinto shed 3.3 percent to 3,269 pence while rival BHP Billiton fell 2.3 percent to 1,883 pence. China's National People's Congress began its annual meeting on Wednesday, with Premier Li Keqiang saying the government was targeting 7.5 growth in 2014, unchanged from last year's forecast. The figure is below the 7.7 percent recorded in 2013 and 2012 -- also the lowest growth rate since 1999. Meanwhile, data released Wednesday suggested the eurozone economic recovery is strengthening. Gross domestic product accelerated to 0.3 percent in the fourth quarter of 2013, while the Eurozone Composite Purchasing Managers Index (PMI), compiled by Markit Economics, showed that business activity expanded at the fastest rate in two-and-a-half years in February. - Tensions over Ukraine far from over - Following a slump at the start of the week, stock markets around the world mostly rebounded on Tuesday after Russian President Vladimir Putin declared there was "no need" yet to send troops into Ukraine. Pro-Kremlin forces are in de facto control of the strategic, majority-Russian Crimean peninsula where Ukrainian troops remain blocked inside their barracks in the most serious stand-off between the West and Russia since the end of the Cold War. "After the strong performance we have seen yesterday, markets have come back (down), with investors taking some profits," said Varengold Bank trader Anita Paluch. "The tensions between Russia and Ukraine are far from over andthe softness is felt in Europe" trading on Wednesday. In foreign exchange deals, the euro fell to $1.3732 from $1.3742late in New York on Tuesday. The dollar climbed to 102.34 yen from 102.21 yen. On the London Bullion Market, the price of gold rose to $1,337 an ounce from $1,334.75 on Tuesday. Russia on Wednesday revealed it sold a record $11.3 billion in foreign currency to support the ruble on March 3, during a "Black Monday" of panic selling over the crisis in Ukraine which analysts say rattled the Kremlin. - Jobs data hit US stocks - US stocks traded mixed Wednesday after a report showed only modest private-sector jobs growth in February. The Dow Jones Industrial Average slid 0.15 percent to stand at 16,371.03 points in midday trading. The broad-based S&P 500 edged up 0.03 percent to 1,874.38, while the tech-rich Nasdaq Composite Index added 0.11 percent to stand at 4,351.97. Payrolls firm ADP said US businesses added just 139,000 jobs in February, well below the monthly average of 186,000 over the last year and below the 150,000 expected by analysts. US stocks had soared on Tuesday and investors pushed the S&P 500 to its second record close in three days on signs of easing tensions over Ukraine. Asian markets mostly closed higher on Wednesday, catching up with European and US gains the day before that had been won on the back of Putin playing down the prospect of war. Elsewhere on Wednesday, Adidas shares fell 3.0 percent to 71.42 euros after a strong euro weighed on the 2013 results of the German maker of sportswear and equipment. While Adidas said it was counting on the World Cup football championships in Brazil to boost sales and earnings this year, the forecasts were still below analysts' expectations.