European markets lower despite improved German sentiment, positive PMIs

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European markets were lower on Wednesday, following a loss in the previous session, despite data showing improved business sentiment in Germany and an uptick in services and manufacturing activity in the Eurozone.

The pan-European Stoxx 600 The index fell 0.7% in mid-afternoon trading.

All sectors fell into the red, technology was down 1.6% and financials fell 1.1%.

Europe appeared to be heeding signals from the US as the corporate earnings season began, with markets mixed on Tuesday and futures lower on Wednesday.

A widely viewed German business confidence poll by the Munich-based Ifo Institute in January showed “significantly less pessimistic expectations”.

Ifo president Clemens Fuest told CNBC that while the German economy could slow in the first quarter, it was unlikely to slip into a technical recession given the improving sentiment.

Meanwhile, the S&P Global Eurozone Composite Purchasing Managers Index came in at 50.2 in January, up from 49.3 in December and above a consensus forecast of 49.8. The 50 mark separates expansion from contraction.

Asia-Pacific stocks were mixed, with Japanese and South Korean markets rising while Australia fell. Markets in Hong Kong and mainland China closed for the Lunar New Year.

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