By Sara Sjolin
LONDON (MarketWatch) -- European stock markets slipped on Tuesday, after data showed growth in the Chinese services sector slowed in September and the U.S. government shutdown moved into Day 8.
The Stoxx Europe 600 index fell 0.5% to 307.61, after closing at the lowest level since Sept. 9 on Monday.
Shares of Novartis AG (NVS) lost 1.1% after J.P. Morgan Cazenove cut the drug maker to neutral from overweight, as the analysts "believe that a large proportion of the benefit from improved capital allocation is already reflected in the Novartis shares."
In the same vein, shares of GDF Suez SA lost 2.3% after Citigroup downgraded the utility firm to neutral from buy, as the "earnings outlooks softens."
Shares of Banca Monte dei Paschi di Siena SpA gained 1.3% after the Italian bank late Monday revealed a restructuring plan, aimed at returning the bank to a sustainable level of profitability by 2017. As part of the plan, the bank will strengthen capital through a 2.5-billion-euro ($3.4 billion) capital increase.
More broadly, investors in Europe looked both to the U.S. and China for reasons to move lower.
In China, the HSBC China Services Purchasing Managers' Index fell to 52.4 in September from 52.8 in August, indicating that growth in the services sector is slowing down. A reading above 50 indicates expansion.
Across the Atlantic, lawmakers still disagreed on a budget for the fiscal year, sending the government shutdown into its eight day. Read: A one-month shutdown risks triggering 20% to 30% correction: Barry Ritholtz
Additionally, both investors and politicians started to worry about the looming debt ceiling in the U.S., which will be hit on Oct. 17 unless Washington agrees on measures to raise the borrowing limit. Failure to lift the debt ceiling could lead to a technical default, although most analysts see this as the less likely outcome. See: The longer shutdown squabbling goes on, the better: RBC Capital's Porcelli
U.S. stock futures pointed to a flat open on Wall Street, after closing sharply lower on Monday.
In Europe, mining firms posted some of the biggest losses, with shares of BHP Billiton PLC (BHP) down 1.8%, Rio Tinto PLC (RIO) off 1.6% and Anglo American PLC 1.2% lower.
The losses weighed on the U.K.'s FTSE 100 index , which shed 0.7% to 6,392.75.
Germany's DAX 30 index eased 0.2% to 8,573.58 after data showed exports picked up in August, but continued to lack momentum and dropped 5.4% on the year.
Additionally, factory orders in Germany in August unexpectedly fell 0.3% in August from July, with the volume of large order below average during the period and orders from abroad on the decline, the Federal Statistical Office said.
Shares of Commerzbank AG lost 1.6% in Frankfurt. The german bank expects full-year profit for the corporate banking unit to come in lower than the 2012 result, board member Markus Beumer told German daily Boersen-Zeitung.
France's CAC 40 index lost 0.4% to 4,147.67.
Curbing losses for the Paris index, shares of Alcatel-Lucent SA climbed 1.7% after the telecommunications-equipment company confirmed a job-cuts plan to reduce 15% of the workforce, aimed at returning the firm to profit by focusing on a handful of core businesses.
Outside the major indexes, shares of Telecom Italia SpA dropped 2.7% after Standard & Poor's placed the firm on creditwatch negative on rising management and governance weakness.
-Sara Sjolin; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
10-08-13 0722ETCopyright (c) 2013 Dow Jones & Company, Inc.
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