European stocks mixed after poor German auction; DAX up 0.1%

Investing.com - European stock markets fluctuated on Wednesday, after poor demand at a German bond auction exacerbated fears over the debt crisis in the euro zone, while some investors entered the market for bargain hunting.

During European afternoon trade, the EURO STOXX 50 shed 0.5%, France’s CAC 40 fell 0.45%, while Germany’s DAX 30 edged 0.1% higher.

Germany’s Treasury auctioned just EUR3.64 billion of 10-year government bonds with the average yield set at 1.98% in an auction earlier. Total bids for German debt fell short of the maximum amount available by 35%, the worst demand on record.

The auction came after preliminary data showing that the euro zone manufacturing purchasing managers’ index slumped to the lowest level since July 2009 in November, falling to 46.4 from 47.1 in October.

Manufacturing output in Germany also dropped to a 28-month low, underlining fears that the euro zone could be slipping into a recession.

A separate report showed that industrial orders in the euro zone fell significantly more-than-expected in September.

Meanwhile, shares in Belgian lender Dexia jumped 4.6%, after being up by as much as 8.4% earlier, amid reports that Belgium and France were in fresh talks over an existing rescue deal for the troubled lender.

Commerzbank shares rallied 5.1%, recouping a portion of the previous day’s 15% plunge after media reports said it may need more capital. Commerzbank Chief Executive Martin Blessing said earlier that the bank can recapitalize on its own.

French lenders were lower after ratings agency Fitch warned that France's triple-A credit rating would be at risk if a further deterioration of the euro zone debt crisis resulted in an economic downturn in France.

Societe Generale shares slumped 2.25%, while BNP Paribas fell 1.2%.

In London, the commodity-heavy FTSE 100 fell for an eighth day, retreating 0.8%, on pace to record the longest stretch of losses since 2003.

Commodity producers led declines after oil and metal prices dropped on the NYMEX, amid concerns over a slowdown in demand from China. Oil and gas major British Petroleum dropped 2.1%, while mining giants Rio Tinto and BHP Billiton slumped 1.35% and 1.1% respectively.

In the U.S., stock futures pointed to a sharply lower open. The Dow Jones Industrial Average futures pointed to a drop of 1%, S&P 500 futures signaled a 1.2% loss, while the Nasdaq 100 futures indicated a 0.9% decline.

Earlier Wednesday, China's November HSBC preliminary manufacturing purchasing managers’ index fell to a 32-month low of 48.0, dropping below the 50-point level that denotes a contraction.

Later in the day, the U.S. was to publish a string of economic data ahead of Thursday’s Thanksgiving holiday, including a government report on durable goods orders, the weekly report on initial jobless claims as well as data on crude oil stockpiles, inflation, personal income and personal spending.

Meanwhile, the University of Michigan was to release revised data on inflation expectations and consumer sentiment.