Market News

U.K. stocks are hit hard on Thursday, as mining firms drop after weak factory data from China and banks decline on a report the sector needs to plug a multibillion-pound capital shortfall.

Gold futures decline after the U.S. Federal Reserve signals it may reduce the amount of monetary stimulus it provides as early as this year.

Asian stocks tumbled Thursday as a deterioration in Chinese manufacturing activity and a further spike in Shanghai interbank lending rates applied more selling pressure after the Federal Reserve signaled it may wind down its bond purchases.

LONDON (MarketWatch) -- The euro-zone downturn eased in June, with the manufacturing sector contracting at the slowest pace in 16 months, data from Markit showed on Thursday. The preliminary manufacturing purchasing managers' index for the euro zone rose to 48.7 from 48.3 in May, beating expectations of a 48.4 reading. A reading below 50 signals contraction. The composite output PMI reading climbed to a 15-month high of 48.9 from 47.7 in May, the data showed. The services PMI for the region rose to 48.6, the best reading since March last year. On a country-specific basis, France's manufacturing PMI jumped to a 16-month high of 48.3, while the reading for Germany slipped to the lowest level in two months. "The flash PMI indicates that the euro zone contracted again in June, rounding off another weak quarter, but there are reassuring signs that the downturn is continuing to ease," said Chris Williamson, chief economist at Markit, in a note.

LONDON (MarketWatch) -- The Bank of England said Thursday that the U.K.'s top banks had a capital shortfall of £27.1 billion ($41.96 billion) at the end of 2012. The Prudential Regulation Authority, which supervises banks, looked at eight institutions and found five need to step up their restructuring and selloff of assets to reach the 7% core capital buffer it requires. The five banks need to find another £13.4 billion to add to existing plans to raise £13.7 billion. Lloyds Banking Group [S: UK:LLOY] has the biggest gap and must find £7 billion, while Royal Bank of Scotland Group [S: UK:RBS] is looking at £3.2 billion, and Barclays PLC [S: UK:BARC], £1.7 billion. Nationwide's existing capital plans are sufficient, the PRA said, while HSBC Holdings PLC , Banco Santander SA [S: es:san] and Standard Chartered PLC [S: uk:stan] do not have a shortfall.

European stock markets move sharply lower on Thursday, after U.S. Federal Reserve Chairman Ben Bernanke says the central bank may scale back its bond purchases this year, depending on the economic outlook.

MADRID (MarketWatch) -- The maker of the 'Candy Crush Saga' games has hired banks to prepare the software developer for an initial public offering, Bloomberg News reported on Thursday, citing two unnamed sources. King.com, whose official name is Midasplayer.com Ltd., has hired JP Morgan Chase & Co., Credit Suisse Group AG and Bank of America Corp. to help it prepare for a listing. The developer hasn't made a decision on how big or when the share sale will take place, those sources said. On June 18, The Wall Street Journal reported it had hired banks.

LONDON (MarketWatch) -- European stock markets opened sharply lower on Thursday, after U.S. Federal Reserve Chairman Ben Bernanke said late the prior day the central bank may scale back its bond purchases this year, depending on the economic outlook. The Stoxx Europe 600 index lost 1.4% to 288.35, on track for a third straight day of losses. Mining firms posted some of the biggest losses in the pan-European index after data showed factory activity slowed further in China in June. Shares of BHP Billiton PLC dropped 3.2% and Anglo American PLC lost 2.3%. U.K. banks also posted losses after the Bank of England identified several banks with capital shortfalls. Shares of Barclays PLC gave up 1.6% and Royal Bank of Scotland Group PLC fell 0.8%. The U.K.'s FTSE 100 index traded 1.2% lower at 6,275.80. Germany's DAX 30 index dropped 1.7% to 8,062.42, while France's CAC 40 index shaved off 1.5% to 3,780.73.

The U.S. dollar climbs, building on gains after the U.S. Federal Reserve says it may slow the pace of bond purchases by the end of the year.

U.S. crude-oil futures fall, as the market grapples with weak manufacturing-activity figures from China, an increase in U.S. oil supply and the signaling by the Federal Reserve that it may slow bond purchases this year.