By V. Phani Kumar And Sarah Turner
A disappointing report on Chinese manufacturing activity rattled markets in Asia and Europe Thursday, sending stocks in Tokyo and London to year-to-date lows.
In TOKYO , the Nikkei Stock Average fell 2% to 9191.60, its fifth straight decline and came even as the Bank of Japan's quarterly tankan survey showed that large manufacturers' business sentiment turned positive for the first time in two years, buoyed by strong exports.
That was overshadowed by weak economic reports elsewhere in Asia.
China's official PMI for June fell to 52.1 from 53.9 in May, reinforcing the view that the Chinese economy may be slowing. June PMI also fell in India, South Korea, Taiwan and Australia.
China's Shanghai Composite fell 1% to 2373.79, Australia's S&P/ASX 200 dropped 1.5% to 4237.46 and India's Sensex slipped 1.1% to 17509.33.
In Japan, the central bank's survey showed the headline diffusion index for large manufacturers rose to one in June from minus 14 in the March survey. Still, technology stocks and auto makers fell. Hitachi slid 2.8%, Honda Motor /zigman2/quotes/207173990/composite HMC -4.68% dropped 3.3% and Toyota Motor shed 2.3%.
Sony shrank 3.7% on concerns about the strength of the yen against the euro and a recall of the company's Vaio laptops.
In Europe, basic resources took the brunt of the selling as base metals prices declined. ArcelorMittal /zigman2/quotes/202790215/composite MT +2.64% fell 2.9% and Randgold Resources /zigman2/quotes/201432642/composite GOLD +0.10% lost 5.4%.
The pan-European Stoxx 600 index fell 2.5% to 237.30.
In LONDON , the FTSE 100 index slid 2.3% to 4805.75. BP /zigman2/quotes/207305210/composite BP +0.64% bucked the trend, rising 2.8%.
In PARIS , CAC-40 index lost 3% to 3339.90. Automakers were among the losers as French new-car registrations fell 1.2% in June. Renault /zigman2/quotes/200919924/delayed FR:RNO -1.08% fell 4% and Peugeot /zigman2/quotes/203546414/delayed FR:UG -4.21% tumbled 4.6%,
In FRANKFURT , the DAX index fell 1.8% to 5857.43. Luxury-car maker BMW fell 4.7% and rival Daimler lost 3.6%.
Deal speculation drove some stock activity. Chloride Group fell 4.1% to 370 pence after Swedish-Swiss engineering firm ABB /zigman2/quotes/209404356/composite ABB -1.77% declined to match an offer by Emerson Electric /zigman2/quotes/200181610/composite EMR -0.01% to buy the British power-systems specialist. The Emerson bid is valued at 375 pence a share. ABB fell 2%.
Shares of sugar producer Tate & Lyle /zigman2/quotes/205109332/delayed UK:TATE +0.52% rose 1% after it announced it would sell its EU Sugar Refining operations to American Sugar Refining for £211 million in cash.
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