By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets moved slightly lower in choppy action on Monday as investors digested a mixed round of euro-zone data and a victory for Angela Merkel's party in the German general election.
The Stoxx Europe 600 index slipped 0.1% to 314.00, after a 0.3% loss on Friday.
Among notable movers in the index, shares of National Grid PLC fell 1.8% after UBS cut the utility firm to neutral from buy.
On a more upbeat note, shares of Aberdeen Asset Management PLC gained 1.8% after the investment firm said underlying pretax profit for the full year is expected to come in toward the upper end of market forecasts.
More broadly, investors digested a round of mixed preliminary purchasing managers' indexes from euro-zone countries. The September services PMIs beat expectations in both France and Germany, while the manufacturing readings missed market views and pulled back compared with August.
The broader euro-zone "flash" composite PMI climbed to a 27-month high of 52.1, beating FactSet expectations of a 51.9 print. A level above 50 signals expansion.
"An upturn in the euro-zone PMI in September rounds off the best quarter for over two years, and adds to growing signs that the region is recovering from the longest recession in its history," said Chris Williamson, chief economist at Markit, in the release.
"The overall rate of growth signaled by the euro-zone PMI remains modest, however, consistent with gross domestic product rising by a meager 0.2% in the third quarter," he added.
German politics were also on investors' minds after Chancellor Angela Merkel's party won a resounding victory in elections on Sunday, but fell short of securing an absolute majority in the Bundestag, the lower house of parliament. Strategist say the most likely outcome now is a grand coalition, which would see a Merkel-led combination of her Christian Democrats and the center-left Social Democrats (SPD).
"Germany's election was good for Angela Merkel, but leaves Europe and the euro in extreme state of uncertainty," said John J. Hardy, head of FX strategy at Saxo Bank, in a note.
"Even a 'grand coalition' with the SPD [is] likely to be anything but grand, and the greater risk from here is that Germany's leadership in Europe risks being as weak as Merkel's victory in the elections was strong. That's at least in part because every EU-related decision in Germany will be a nervous exercise in calculating the effects of domestic politics within an uncomfortable coalition," he added.
The euro (EURUSD) dropped to $1.3509, from $1.3523 late Friday.
Germany's DAX 30 index slipped 0.1% to 8,666.76.
France's CAC 40 index was marginally higher at 4,204.54, while the U.K.'s FTSE 100 index moved 0.4% lower to 6,572.96.
Shares of Total SA (TOT) gained 1.3% in Paris after the oil major said it anticipates a strong increase in cash flow from upstream startups and downstream restructuring.
Outside the major indexes, shares of Metso Oyj dropped 2.2% in Finland after Morgan Stanley cut the engineering and technology firm to equal weight from overweight.
-Sara Sjolin; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
09-23-13 0731ETCopyright (c) 2013 Dow Jones & Company, Inc.
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