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European Markets Erase Early Gains

4/3/2012 7:14 AM ET

The European markets erased early gains in afternoon trading on Tuesday, as growth worries continued to dissuade investors from buying risky assets. In early trading, sentiment was influenced by China's non-manufacturing sector data. Banks are mostly weak while drugmakers are gaining.

The British Chambers of Commerce said the economy is showing signs of improvement and may avoid a recession. Still, economic growth remains "weak," the industry group said. The BCC expects the economy to expand 0.3 percent in the first quarter of 2012, after suffering a 0.3 percent contraction in the fourth quarter.

The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.54 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.43 percent.

The German DAX is falling 0.17 percent and the French CAC 40 is losing 0.43 percent. The UK's FTSE 100 is dropping 0.20 percent and Switzerland's SMI is sliding 0.43 percent.

In Frankfurt, Bayer HealthCare said its late stage study of regorafenib met its primary goal of statistically significant improvement of progression-free survival in patients with metastatic and unresectable gastrointestinal stromal tumors. Bayer is up 0.2 percent.

BMW and Daimler are in negative territory while Volkswagen is moderately up.

Commerzbank is declining 0.7 percent while Deutsche Bank is rising 0.6 percent.

Adidas and K+S are down 1.1 percent each. Nomura reduced its rating on K+S to "Reduce" from "Neutral."

Morgan Stanley cut Deutsche Post to "Equalweight" from "Overweight." The stock is losing 0.8 percent.

Zooplus is declining 4.5 percent. The stock was downgraded to "Hold" from "Buy" at Berenberg.

In Paris, BNP Paribas is losing moderately while Credit Agricole and Societe Generale are in positive territory.

EDF is climbing 2.7 percent and Accor is advancing 1.8 percent. Alcatel Lucent is rising 1.3 percent.

Outside the main index, shipping firm Bollore is adding 3.8 percent.

Compass Group is losing about 2 percent reportedly on a broker downgrade.

Bunzl is losing 1.6 percent. Publishing group Pearson is declining about 2 percent.

Cairn Energy is climbing 3.5 percent. The company is acquiring Agora Oil & Gas AS, a private Norwegian company with development assets in the UK and Norwegian North Sea, in a cash and stock deal valued at $450 million.

GlaxoSmithKline announced topline results from seven of the eight 'Harmony' Phase III studies investigating the use of albiglutide in type 2 diabetes. The data support progression towards regulatory filings. The stock is up 0.4 percent.

AstraZeneca is advancing 0.7 percent after announcing an agreement with Amgen to jointly develop and commercialize five monoclonal antibodies from Amgen's clinical inflammation portfolio.

Aberdeen Asset Management is advancing 2.4 percent. Morgan Stanley reportedly reiterated its rating on the stock and increased its price target.

UCB is climbing 2.7 percent in Brussels. The U.S. Food and Drug Administration approved the company's Neupro for the treatment of the signs and symptoms of advanced stage idiopathic Parkinson's disease and as a treatment for moderate-to-severe primary Restless Legs Syndrome.

Lonza is gaining 3.4 percent in Zurich. The company elected Richard Ridinger as new chief executive officer, with effect from May 1.

Novo Nordisk is climbing 4.8 percent in Copenhagen. Merrill Lynch reportedly added the drugmaker to its Europe 1 list.

Givaudan is up 0.2 percent. Nomura raised the stock to "Neutral" from "Reduce."

Nomura cut Akzo Nobel to "Neutral" from "Buy." The stock is losing about 2 percent in Amsterdam.

In economic news, Eurozone producer price inflation eased to 3.6 percent year-on-year in February from a revised 3.8 percent in January, Eurostat said. The inflation rate, nonetheless, stayed above the consensus forecast of 3.5 percent.

Activity in the British Construction sector increased at a notably faster pace in March, contrary to economists' expectations for a slowdown, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply revealed. The seasonally adjusted purchasing managers' index for the construction sector climbed to 56.7 in March from 54.3 in February.

A report published by the China Federation of Logistics and Purchasing showed that China's non-manufacturing sector expanded in March. The purchasing managers' index for the service sector rose to 58 in March. CFLP last month reported the February reading as 48.4. The Shanghai Composite Index

Across Asia/Pacific, Australia's All Ordinaries added 0.18 percent and Hong Kong's Hang Seng climbed 1.31 percent while Japan's Nikkei 225 fell 0.59 percent.

In the U.S., futures point to a lower open on Wall Street. In the previous session, the major averages gave back some ground going into the close but held on to notable gains. The Dow rose 0.4 percent, the Nasdaq advanced 0.9 percent and the S&P 500 climbed 0.7 percent.

In the commodity space, crude for May delivery is sliding $0.73 to $104.50 per barrel and June gold is losing $0.1 to $1679.6 a troy ounce.

by RTT Staff Writer

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