Solid gains for European stock markets faded in early afternoon trade Thursday, as initial optimism over better-than-expected factory data from China was replaced with ongoing worries about slowing growth in the global economy. The Stoxx Europe 600 index SXXP, +0.60% was up 0.4% at 349.41, after trading as high as 353.07 earlier in the day. The region's equity benchmark had opened sharply higher, after China's official manufacturing purchasing managers' index ticked up to 49.8 in September, from 49.7 in August, beating analysts' forecasts. But around lunchtime, gains across Europe started to fizzle as investors returned their attention to the weakness in commodity markets and the global economy. "There was some optimism this morning about the starting the fourth quarter, but it wasn't fundamentally supported," said Ipek Ozkardeskaya, market analyst at London Capital Group. "Now investors are focusing more on fundamentals and the broader worries and the fact that the confidence isn't there — it's not there for macro-driven events and not there for company-driven factors," she said. Data: In the eurozone, PMIs released Thursday showed manufacturing activity slowed in September. The PMI for the currency union as a whole fell to 52 last month, unchanged from the flash estimate, but down from 52.3 in August. A reading above 50 signals expansion. In Germany, the manufacturing PMI fell to 52.3, from 53.3 in August, while France posted an uptick to 50.6, from 48.3. "The overall impression is that eurozone GDP growth seemingly remains locked around 0.4% quarter-on-quarter, where it has effectively been since the third quarter of 2014," said Howard Archer, chief U.K. and European economist at IHS Global Insight, in a note. "Nevertheless, it is currently hard to see eurozone growth really kicking on, and there is the very real risk that slowing growth in the emerging markets centered on China not only hits eurozone exports, but also has an appreciable negative impact on eurozone business sentiment and leads to a scaling back of investment and employment plans," he added. In the U.K., a separate reading on the September manufacturing PMI came in at 51.5, down from a revised reading of 51.6 in August. Indexes: Germany's DAX 30 index DAX, -0.42% was down 0.5% to 9,617.18, as the global growth-fears took a toll on investment sentiment for the export-driven economy. France's CAC 40 index PX1, +0.46% rose 0.4% to 4,473.01, while the U.K.'s FTSE 100 index UKX, +0.95% gained 0.8% to 6,111.88. Movers: Shares of Tullow Oil PLC TLW, +9.93% surged 8.3%. The U.K. oil and gas explorer said its lending banks have maintained credit lines at $3.7 billion as oil prices have dropped. Tullow also said its project off the coast of Ghana is on schedule and on budget to deliver first oil in the middle of next year. Shares of Altice NV ATC, -6.81% slid 8.1% after the telecom company said it would raise about 1.8 billion euros ($2.02 billion) in capital to help finance its $10 billion acquisition of Cablevision Systems Corp. CVC, +1.32% The Chinese manufacturing data helped prop up the mining sector, with shares of Anglo American PLC AAL, +1.27% up 0.8% and Rio Tinto PLC RIO, +1.43% RIO, +1.55% RIO, +2.02% rising 1%. Source: MarketWatch
