LONDON: Europe's main stock markets ended largely flat on Monday as traders fretted ahead of the European Central Bank's meeting this week after mixed economic data.
Frankfurt's DAX 30 edged up 0.07 percent to close at 9,950.12 points.
London's FTSE 100 index of top companies ended up 0.29 percent to 6,864.1 points, while the CAC 40 in Paris shed 0.08 percent to 4,515.89 points.
"Softening in European and US manufacturing expansion in May caused stocks in Europe to slump today despite data from China pointing to a possible growth turnaround," said Jasper Lawler at CMC Markets.
"Expectations of stimulus from the ECB later in the week was only evident in the weaker euro."
European stocks shrugged off early gains after data from Markit Economics released Monday revealed that its Eurozone Composite PMI for May fell to a six-month low of 52.2.
Activity in Germany's manufacturing sector slowed more sharply than expected while France, the eurozone's second-largest economy which is struggling to boost growth, was the weakest of the economies surveyed.
Later Monday the European Commission, the EU's executive arm, warned France that its efforts to fix its public finances were falling short of expectations and said it will remain under close supervision.
Paris has promised 50 billion euros of budget cuts and reforms to reduce its budget deficit to within the EU's target of 3.0 percent of gross domestic product, but European Commission head Jose Manuel Barroso said that was still "only partly in line with the requirements".
Meanwhile inflation in Germany, Europe's biggest economy, slowed to 0.9 percent last month, its lowest rate in four years in May, adding to pressure on the ECB to act to stop the bloc falling into deflation.
Christian Schulz at Berenberg said the figures were "probably washing away the last ECB hold-outs against further policy easing".
"While the ECB looks set to cut interest rates and offer some lending incentives this week, we think much more will be needed to eradicate the risk of deflation," said Capital Economics.
China boosts sentiment:
US stocks Monday moved mostly lower in early trade as the mediocre data from Europe dragged indices down from last week's record highs.
About 30 minutes into trade, the Dow Jones Industrial Average advanced 0.01 percent to 16,718.59, while the broad-based S&P 500 dipped 0.18 percent at 1,920.14.
The tech-rich Nasdaq Composite Index fell 0.52 percent to 4,220.51.
The weak performance in the United States and Europe came after upbeat data from China pointing to improving economic growth in the world's second-largest economy.
China's manufacturing activity strengthened to a five-month high in May, the government said on Sunday, an optimistic sign amid slumping growth in the world's second-largest economy.
The official purchasing managers index (PMI) reached 50.8 in May, the National Bureau of Statistics said in a statement, up from 50.4 in March. A reading above 50 indicates growth.
The result, the third straight month of improvement, beat the median forecast of 50.6 in a survey of eight economists by Dow Jones Newswires.
"Chinese data is providing a boost for equity and commodity markets... with stronger than expected manufacturing activity," said Rebecca O'Keeffe, head of investment at online stockbroker Interactive Investor.
Mining companies were big winners in London after the upbeat data from major commodity consumer China.
In foreign exchange deals on Monday, the euro stood at $1.3622, down from $1.3630 late in New York on Friday. The European single currency eased to 81.30 British pence from 81.39 pence.
The British pound rose to $1.6756 from $1.6750 on Friday.
The price of gold eased to $1,244.75 an ounce from $1,250.50 on Friday on the London Bullion Market.
Asian equity markets also rose Monday, buoyed by record closes on Wall Street. Financial markets in Hong Kong, China, Taiwan and New Zealand were closed for public holidays.
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