European Stocks Mixed on Weak US Manufacturing Data

European stocks remained mixed in the early minutes of trading, as weaker-than-expected US manufacturing data and Italian political concerns dampened investor sentiments.

The FTSEurofirst 300 index, tracking the region's top shares, gained 0.1 percent to 1,190.0. The UK's FTSE 100 remained little changed while Germany's DAX was up 0.2 percent.

Italy's FTSE MIB and Spain's IBEX were down 0.4 and 0.1 percent respectively. In France, the CAC-40 rose 0.2 percent.

The single currency remained weak against the dollar, trading at about $1.28.

US economic optimism received a setback after the Institute of Supply Management (ISM) reported that the country's manufacturing activity was lower than expected in March. The index slipped to 51.3 during the month from the 54.2 recorded in February.

The data came after China's official manufacturing Purchasing Managers Index, released earlier this week, fell short of expectations, paving way for concerns of a tepid economic recovery in the country.

Closer to home, Italian political concerns have returned to focus as the country's President Giorgio Napolitano meets working committee advisors in an effort to break the political deadlock.

The country remains mired in political uncertainty as parties fail to form alliances. This is delaying the much-needed reform measures which are crucial to the whole euro area economy.

Meanwhile, Spain is planning to scale down its economic outlook for 2013 this week and look for more time to cut down the budget deficit, reports Reuters. The country's GDP is predicted to contract 1 percent compared to the earlier estimate of a 0.5 percent contraction.

Asian markets had traded mixed earlier, as the US manufacturing data and a strong yen sparked economic concerns.

The Nikkei ended 1 percent lower to 12003.4 while South Korea's KOSPI was down 0.5 percent to close at 1986.2. Australia's S&P/ASX 200 added 0.4 percent to 4985.5.

China's Shanghai Composite Index was down 0.3 percent to 2228.3 towards close, which Hong Kong's Hang Seng traded 0.06 percent higher to 22313.7.

Japanese market sentiments remained weak as the yen recovered from its record low levels against the dollar. The greenback traded at about 92 yen towards Tokyo market close after having firmed as much as 96 yen in the previous month.

Investors are awaiting Bank of Japan's two-day monetary policy meet scheduled to start this week amid speculation that the new central bank governor may initiate bold monetary easing steps to boost the economy.

The Reserve Bank of Australia has held its key policy rate steady at its April policy meet, citing the improving global and domestic economic conditions. The decision was in line with market expectations.

Australia's economy has improved of late, with consumer confidence and the labour market picking up in the recent months. But analysts suggest that the central bank might look to ease its policy further this year, in a bid to boost activities outside the mining sector.

"Recent data have shown that Australia's economy is retaining good momentum," said Daniel Martin, analyst at Capital Economics.

"We still think there will be more policy loosening this year, as the RBA looks to further stimulate the non-mining economy to compensate for the coming cooling of the country's mining investment boom."