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European shares knocked down by mining and travel stocks

Published 01/06/2016, 08:53 pm
Updated 01/06/2016, 09:00 pm
© Reuters.  European shares knocked down by mining and travel stocks
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* FTSEurofirst 300, STOXX 600 both down around 1 pct

* Miners fall after mixed China PMI

* French tourism stocks fall after U.S. travel alert

* Ahold rises after results

By Alistair Smout

LONDON, June 1 (Reuters) - European shares fell on Wednesday, hit by a drop in commodity stocks and banks, while the travel sector came under pressure after the U.S. issued a travel alert over the possibility of attacks in Europe this summer.

The pan-European STOXX 600 .STOXX and FTSEurofirst 300 .FTEU3 indexes both fell by around 1 percent, each having already declined by 0.8 percent on Tuesday.

The worst-performing sector was the STOXX 600 Basic Resources index .SXPP , which contains major mining stocks and which fell by 3.3 percent.

Mining stocks dropped after data out on China's manufacturing activity, which suggested the world's second-largest economy is still struggling to regain traction.

The Caixin/Markit Manufacturing Purchasing Managers' index (PMI) showed activity at China's factories shrank for a 15th straight month in May. The official manufacturing May PMI painted a slightly more optimistic picture and stood unchanged from the previous month at 50.1 ECONCN .

"Overnight, China PMI figures were a mixed bag, with official figures showing marginal growth and unofficial indicating a slowdown," said Ana Thaker, Market Economist at PhillipCapital UK.

"China has expressed a desire to move to a consumer led economy but these figures pose a problem for the country as it struggles to boost the non-manufacturing sector."

Oil and gas shares .SXEP also fell, tracking weaker oil prices which fell on expectations that an OPEC meeting would shun any curbs on output. O/R

The travel and leisure sector .SXTP also underperformed to fall 1.5 percent, after the United States warned of possible terror attacks this summer in Europe. travel and tourism stocks, such as Air France KLM AIRF.PA and hotels group Accor ACCP.PA led the sector lower.

The French travel industry is already being hit by strikes, and the Euro 2016 soccer tournament, starting next week, is seen as a major security challenge. have thought that Accor is suffering a bit," said Rupert Baker, European equity sales executive at Mirabaud Securities.

Italian banking shares were also dragged down by Banco Popolare BAPO.MI , which slumped 6.3 percent after media reports said Italy's market watchdog will give its go ahead to the bank's cash call later today.

Healthcare company Elekta EKTAb.ST fell 7 percent after its first quarter earnings lagged market expectations, but Ahold AHLN.AS rose 3.4 percent after the Dutch supermarket operator's results beat forecasts. European research round-up RCH/EUROPE

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA.

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