By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets struggled for
direction on Thursday after preliminary euro-zone PMI confirmed
business activity in the region continued to grow in May, while
tensions heightened in Ukraine.
The Stoxx Europe 600 index was marginally higher at 340.49, but
was swinging between small gains and losses.
Shares of SABMiller PLC gained 3.5% after the brewer reported a
slight increase in full-year profit. The company said its strength
in developing markets such as Africa and Latin America had held up
in the past 12 months, but that it sees ongoing weakness in Europe
and North America.
Also pushing higher, shares of Austria's third-largest bank in
terms of assets, Raiffeisen Bank International AG , picked up 5.5%
after the company reported an increase in first-quarter profit even
though tensions between Ukraine and Russia caused an increase in
risk provisions.
On a more downbeat note, shares of Royal Mail PLC slumped 7.5%
after the company said it faces a couple of headwinds, including
intense competition on the parcels side.
More broadly, investors took in a round of purchasing managers'
indexes and the latest developments in Ukraine. At least 11
soldiers died and 30 others were wounded in an attack on troops in
Ukraine's eastern region of Donetsk, according to media reports.
The news came as Russia appeared to be pulling its troop back from
the Ukraine border and Ukrainians prepare to head to the polls this
weekend to pick a new president.
Meanwhile, Markit's euro-zone composite PMI fell to a two-month
low of 53.9, from 54 in April. However, it came in slightly ahead
of expectations and stayed above the 50.0 level that indicates
growth. Markit said the data indicate the euro zone is having its
best quarter in three years and that "ongoing improvement in
business conditions was evident in both manufacturing and
services."
The country-specific readings showed further divergence between
powerhouse Germany and France, which has struggled with economic
headwinds recently. The French composite PMI slipped into
contraction at 49.3, while Germany stayed at 56.1 in May.
France's CAC 40 index fell 0.1% to 4,462.88, while Germany's DAX
30 index put on 0.1% to 9,711.88.
In China, the manufacturing PMI rose to a five-month high of
49.7 in May, from a final reading of 48.1 in April, according to
the preliminary reading from HSBC. The data supported miners in
Europe, as they are heavily exposed to Chinese growth. Shares of
Antofagasta PLC picked up 2.1%, Rio Tinto PLC (RIO) rose 1.6% and
Glencore PLC (GLCNF) added 1.1%.
The gains helped lift the U.K.'s FTSE 100 index , which rose
0.1% to 6,827.99.
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