LONDON - European stock markets fell sharply Tuesday after some disappointing economic news and U.S.-led airstrikes against Islamic State militants in Syria. The falls came despite an unexpectedly strong Chinese manufacturing survey that helped ease worries in Asia over the state of the world's number 2 economy.
In Europe, France's CAC-40 fell 1.9 percent to 4,359 while Germany's DAX was 1.3 percent lower at 9,621. The FTSE 100 index of leading British shares was down 1.4 percent at 6,680. Wall Street was poised for some modest falls at the open with both Dow futures and the broader S&P 500 futures down 0.2 percent.
The tone in European stock markets wasn't helped by further evidence showing that the 18-country eurozone economy is failing to find any renewed momentum. In its monthly survey, financial information company Markit said its purchasing managers' index for the eurozone - a closely watched gauge of business activity - fell to a nine-month low of 52.3 in September from the previous month's 52.5.
Further weighing on sentiment in stock markets is the news that the U.S. and five Arab nations attacked the Islamic State group's headquarters in eastern Syria in nighttime raids. Land- and sea-based U.S. aircraft as well as Tomahawk cruise missiles launched from two Navy ships in the Red Sea and the northern Persian Gulf were used.
"The escalation of the conflict will of course raise questions over the risk appetite of many within the markets, who are no doubt worried about a major war which appears to be unfolding," said Joshua Mahoney, research analyst at Alpari.
Earlier, HSBC's purchasing managers' index showing unexpectedly strong Chinese manufacturing in September, helping to ease fears of a sharper slowdown in the world's second-largest economy. The PMI rose to 50.5 from August's 50.2 on a 100-point scale on which numbers above 50 indicate expansion. That exceeded forecasts that called for a decline due to a slump in China's real estate market, a major driver of manufacturing activity.
The Shanghai Composite Index gained 0.9 percent to 2,309.72 and Sydney's S&P ASX 200 was up 1 percent at 5,415.70. Hong Kong's Hang Seng shed 0.3 percent to 23,879.36 and Seoul's Kospi fell 0.5 percent to 2,028.91. Tokyo was closed for a holiday.
The euro was up 0.3 percent at $1.2890 while the dollar fell 0.2 percent to 108.51 yen. In the oil markets, a barrel of benchmark crude rose 72 cents to $91.59.