Europe close: Stocks slip amid rate hike worries

(Sharecast News) - European shares lower on Friday driven by fears over future rate rises in the wake of hawkish central bank comments this week, and preliminary eurozone survey data showing manufacturing activity continued to slow although output marginally improved. The pan-European Stoxx 600 index fell 0.31% to 453.26, with the French Cac-40 dipping 0.4% to 7,184.82 while Italy's FTSE Mib fell 0.46% alongside to 28,575.90.

US stocks were modestly higher, rebounding after another large drop overnight after the Federal Reserve paused rates, but said the case for cuts was yet to be made and in fact the next moves may be upwards to supress inflation.

Eurozone manufacturing still struggling

In economic news, Eurozone output nudged higher in September, a closely-watched survey showed on Friday, but the struggling manufacturing sector continued to weigh on growth.

The flash HCOB Eurozone composite PMI output index came in at 47.1, up from 46.7 in August and marginally above forecasts, for a slight dip to 46.5.

However, the index remains below 50. A reading above the neutral 50 mark indicates growth but one below it suggests contraction.

The biggest drag on the composite index was the manufacturing sector. The Eurozone manufacturing PMI output index remained unchanged at 43.4, while the manufacturing PMI dipped to 43.4 from 43.5.

In Germany, Europe's biggest economy, business activity fell for the third consecutive month in September due to a sustained decline in demand for goods and services, pointing to a "deep" economic contraction in the quarter, a preliminary survey showed.

The HCOB/S&P global German flash composite purchasing managers' index rose to 46.2 in September from August's 44.6, but below the 47.2 forecasts by economists.

Adevinta surges on takeover proposal

In equity news, shares in classifieds company Adevinta surged by 27% on news that it had received a takeover proposal from a consortium that includes private equity platers Permira and Blackstone.

Ubisoft rose 5% as Britain's competition regulator said Microsoft's revised effort to get its £55bn takeover of Activision Blizzard "substantially addresses previous concerns."

The new remedy would see Call of Duty maker Activision's cloud streaming rights outside of the EU being sold to Ubisoft.