European stocks mixed to lower, eyes on Spain; DAX up 0.17%

Investing.com - European stock markets were mixed to lower on Monday, after Spain reported its economy shrank less-than-expected as fears over the worsening of the country’s debt crisis persisted.

During European morning trade, the EURO STOXX 50 fell 0.41%, France’s CAC 40 dropped 0.54%, while Germany’s DAX 30 added 0.17%.

Official data showed that Spanish gross domestic product fell 0.3% in the first quarter, the same as in the previous three months, and therefore slipping into a recession. Analysts had expected the country’s GDP to fall 0.4%.

Market sentiment also remained under pressure after ratings agency Standard & Poor’s cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.

A separate report showed earlier Monday that German retail sales rose 0.8% in March, in line with expectations, after a 0.9% fall the previous month.

Financial stocks were broadly higher, led by Italian lender Unicredit, up 1.76%, and closely followed by Holland’s ING Group, whose shares jumped 1.48%.

France’s Societe Generale and BNP Paribas also climbed 1.65% and 0.95% respectively, while German Commerzbank surged 2.93%.

Nokia Finland was one of the session’s top gainers, jumping 2.56%, although the company’s rating was lowered Friday to junk by Standard & Poor’s, the second debt rating company to strip the Finnish mobile-phone maker of an investment grade after losses at its handset business.

Meanwhile, car makers also contributed to gains as shares in Volkswagen advanced 1.53%, while Daimler and BMW added 0.75% and 0.42%.

In London, commodity-heavy FTSE 100 fell 0.22%, weighed by losses in mining and energy stocks.

Shares in Rio Tinto retreated 0.48%, as the company was set to increase the size of its Pilbara workforce in Western Australia by at least 50% in the next few years.

Copper producers Xstrata and Kazakhmys were also on the downside, with shares slipping 0.23% and 0.14% respectively, while International Power edged down 0.05%.

Elsewhere, financial stocks were mixed. Lloyds Banking dropped 0.74%, Barclays declined 0.40% and shares in HSBC Holdings eased 0.05%.

Meanwhile, the Royal Bank of Scotland saw shares climb 0.45% following reports stating that the taxpayers' stake in the U.K. lender could be sold off in as little as two years, far earlier than previously suggested by the government and the bank itself.

In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to rise of 0.06%, S&P 500 futures signaled a 0.03% decline, while the Nasdaq 100 futures indicated a 0.02% loss.

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Later in the day, the euro zone was to release preliminary data on consumer price inflation.

The U.S. was to publish official data on core personal consumption expenditures price inflation and personal spending, as well as a report on business activity in Chicago.