Stocks keep falling as weak Eurozone data overshadows China uptick by Geoffrey Smith @FortuneMagazine September 23, 2014, 5:59 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons A closely-watched indicator showed that China’s economic slowdown may not be as drastic as feared, but international stock markets continued to fall as the same indicator provided further evidence of the Eurozone’s inability to get out of its economic rut. The data made a double whammy for European stocks, which were also under pressure after a sweeping U.S. crackdown on tax inversion-driven mergers killed takeover speculation in a number of stocks, especially in the pharmaceuticals industry. The HSBC/Markit Purchasing Managers’ Index for China, which investors see as a roughly reliable and timely guide into the manufacturing sector’s fortunes, posted a small rise in September to 50.5 from 50.2 in August. That was above market expectations for a fall to 50.0, the level that in principle signals no change in economic output. Markets had had a bad hair day Monday after China’s finance minister Lou Jiwei, at a weekend meeting of G-20 finance ministers, said the government wouldn’t launch a new round of stimulus measures despite signs of slowing growth. Lou’s comments had hit commodities markets hard, because China is a key source of demand for many of them, and had also hit stocks around the world because of the negative implication for global economic growth. Hongbin Qu, chief economist for China at HSBC, said Tuesday the picture from the PMI survey was “mixed”, with modest rises in new orders offset by weakening prices and a further softening in the labor market. Marc Ostwald, an economist with ADM ISI in London, noted that the employment component of the data was likely to command the greatest attention from the authorities in Beijing. A sigh of relief in Asian markets was short-lived as Markit’s PMI for the Eurozone fell to a nine-month low of 52.3 from 52.5 a month earlier. The main reason for that decline was a sharp drop in the manufacturing index for Germany, the region’s workshop, while France’s manufacturing sector also continued to contract, albeit at its slowest rate in four months. The data came less than a week after the European Central Bank’s new stimulus measures–cheap, long-term loans to banks to support their lending to the economy–appeared to fall flat, with banks making less use of the facility than analysts had expected. ECB President Mario Draghi told the European Parliament Monday that the take-up was still within his range of expectations, but warned that the economy “is losing momentum” and begged for governments to do more to revive it, whether through structural reforms or, in the case of countries that can afford it (i.e. Germany), extra spending. Markit chief economist Chris Williamson said the Eurozone figures suggested that the region would have grown “at best” by 0.3% in the third quarter, after failing to grow at all in the second. By mid-morning in Europe. the Euro Stoxx 600 index was down 1.1%, while France’s CAC-40 was under even more pressure, down -1.5%. The euro, however, was up fractionally against the dollar at $1.2875.