* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 down 0.7 pct
* China's lower-than-expected PMI weighs on sentiment
* Companies with big Russia exposure hammered again
* Buy French, Italian stocks over UK, German ones -SocGen
By Blaise Robinson
PARIS, March 24 European stocks slipped on
Monday, trimming last week's lofty gains, as data showing
China's manufacturing activity contracted in the first quarter
of 2014 revived worries over the outlook for global growth.
Investors' appetite for stocks was also dented by tensions
simmering between the West and Russia, with shares of companies
which have a big exposure to Russia under renewed pressure.
Finnish tyre maker Nokian Renkaat was down 1.5
percent, Austrian lender Raiffeisen Bank International
down 2.4 percent and Danish brewer Carlsberg down 1
percent. The three firms derive about 26 percent, 22 percent and
17 percent respectively of their revenues from Russia, according
to data from MSCI.
NATO's top military commander said on Sunday Russia had
built up a "very sizeable" force on its border with Ukraine, and
that Moscow may have a region in another ex-Soviet republic,
Moldova, in its sights after annexing Crimea from Ukraine.
At 1117 GMT, the FTSEurofirst 300 index of top
European shares was down 0.5 percent at 1,300.27 points, after
gaining 1.8 percent last week.
China's flash Markit/HSBC Purchasing Managers' Index (PMI)
fell to an eight-month low of 48.1 in March, a
weaker-than-expected figure. The index has been below the 50
level since January, indicating a contraction in the sector this
"As the data shows this morning, China's slowdown is sharper
than what most people had expected, which fuels worries about
the impact on global growth," said Philippe de Vandiere, analyst
at Altedia Investment Consulting in Paris.
"But Chinese authorities have plenty of tools to avoid a
hard landing, and we know that the country's transition to an
economic model more focused on consumer spending will lower its
growth rate a bit, so no big concern here."
Industrial stocks lost ground, with both Siemens
and Schneider Electric down 0.8 percent.
The overall market's losses were cushioned, however, by data
showing French business activity grew in March at the fastest
pace in more than 2-1/2 years, with Markit's composite PMI
jumping to 51.6 from 47.9 in the previous month.
Having lagged the recovery in much of the euro zone in
recent months, the index for France surged through the key
50-point threshold dividing contraction from expansion to reach
its highest level since August 2011.
Roland Kaloyan, Societe Generale's head of European equity
strategy, favours the French and Italian stock markets over
those of Switzerland, Britain and Germany.
"All the non-euro zone countries have benefited from risk
aversion in the euro area but they now seem to have run out of
steam after four years of impressive performance," Kaloyan wrote
in a strategy note.
"We particularly like the French and Italian equity markets.
Both would benefit from a major political and economic shift in
the coming years. Given their attractive valuations, we believe
that both markets have huge potential to deliver."
Overall for the euro zone, data showed on Monday the pace of
growth among the region's private businesses has barely slowed
from February's 2-1/2 year high this month, although firms were
forced to cut prices again to maintain the momentum, fuelling
worries of deflation.
Around Europe, Britain's FTSE 100 index was down 0.4
percent, Germany's DAX index down 0.6 percent, and
France's CAC 40 down 0.7 percent. The euro zone's
blue-chip Euro STOXX 50 index was down 0.7 percent.
So far this year, the FTSE 100 is down 3.2 percent, the DAX
is down 2.8 percent and the CAC is up 0.3 percent, while Milan's
FTSE MIB is up 10 percent.
"The equity market's long-term trend is still positive,"
Barclays France director Franklin Pichard said. "But in the
short term, indexes could remained stuck in this consolidation
zone and within tight ranges."
Shares in Bayer were among the biggest European
blue-chip losers, down 2 percent, after Britain's healthcare
cost agency recommended the state health service not use the
firm's new prostate cancer drug Xofigo.
Europe bourses in 2014: link.reuters.com/pad95v
Asset performance in 2014: link.reuters.com/rav46v
Today's European research round-up
(Additional reporting by Sudip Kar-Gupta in London; Editing by