European stocks slump on China data, French vote

Europe's main stock markets slid into the red on Monday as traders reacted to French presidential election results, Chinese manufacturing data and persistent eurozone debt tensions. In late morning Paris trade, the CAC 40 shed 1.28 percent to 3,147.78 points after Socialist challenger Francois Hollande surpassed French President Nicolas Sarkozy at the weekend in the first round of France's presidential election. London's benchmark FTSE 100 index dropped 1.34 percent to 5,695.03 points and in Frankfurt the DAX 30 slumped 2.12 percent to stand at 6,609.16. Madrid retreated a heavy 2.68 percent, as official data showed Spain's economy plunged into recession in the first quarter of 2012, shrinking by an estimated 0.4 percent. In foreign exchange trading, the euro slid to $1.3181 from $1.3216 late in New York on Friday. "Two major factors are dragging down the markets in today's session -- the HSBC flash PMI for China which is still weak ... and the results of French presidential elections, with a socialist not necessary a darling of the financial markets," said Gekko Global Markets trader Anita Paluch. Asian stock markets slipped on Monday as slightly improved manufacturing data from China failed to dampen fears of a slowdown in the world's number two economy. Tokyo gave up early gains to close down 0.20 percent, Hong Kong finished 1.84 percent lower, Sydney shed 0.32 percent, Seoul dipped 0.10 percent and Shanghai dropped 0.76 percent. The preliminary HSBC China manufacturing purchasing managers index rose to a two-month high of 49.1 in April compared with a final reading of 48.3 in March. A reading above 50 indicates expansion, while a reading below 50 suggests contraction. The move higher "suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown," HSBC chief economist for China Qu Hongbin said in a statement. However, "the pace of both output and demand growth remains at a low level in a historical context and the job market is under pressure. This calls for additional easing measures in the coming months," he added. In Europe on Monday, Socialist frontrunner Francois Hollande and incumbent Nicolas Sarkozy launched the campaign for France's presidential run-off with the far-right set to play a key role after a record result. The two are to face off on May 6 after Sunday's first round saw Hollande beat Sarkozy by a vote of 28.63 to 27.08 percent, according to near complete official results. Hollande's victory cemented his position as the clear leader in the race, dealing a blow to right-winger Sarkozy's hopes of gaining enough momentum from a first-round win to defy expectations and return to office. But it was the shock showing of anti-immigrant, anti-EU flagbearer Marine Le Pen, at 18.01 percent, that shook up the race, setting up her voters as potential kingmakers.