European equities slide amid Frankfurt closure

London - European stock markets fell on Monday on disappointing Chinese data, but trade was subdued owing to a holiday closure in Frankfurt.

London stocks shed 0.4%, Madrid lost 1.0% and Paris dropped 0.8%, as investors fretted over fresh evidence of China's economic slowdown.

Frankfurt will reopen for business on Tuesday.

"It was Monday Blues in European markets after weak economic data from China released over the weekend added to investor woes brought about by Wall Street falling to its lowest in a month," said CMC Markets analyst Jasper Lawler.

"The Whit Monday holiday has dampened trading volumes."

Asian markets however rallied following last week's sharp losses, with Tokyo boosted by a report that Japan's prime minister plans to delay a planned sales tax increase.

And Shanghai stocks finished 0.8% higher despite the weak data, buoyed by central bank assurances that it would continue with policies to support growth.

Chinese industrial output, retail sales and fixed-asset investment all came in below expectations, the latest disappointing data out of Beijing following below-par trade figures the previous weekend.

"The FTSE 100's rollercoaster ride continues, starting the week with a quick dive, unwinding an impressive rally on Friday afternoon," added Lee Wild, head of equity strategy at online stockbroker Interactive Investor.

"Data out of China over the weekend disappointed at every level - industrial production, retail sales and investment growth."

In Asia meanwhile, Tokyo investors cheered a report Saturday in the respected Nikkei business daily that Shinzo Abe had told officials he wants to put off the consumption tax rise to avoid damaging the already tottering economy. It is not known how long he intends to postpone it.

The last rise in April 2014 - the nation's first in 17 years - was blamed for stalling a nascent recovery and pushing Japan into a recession from which it has hardly recovered.

While experts say Tokyo must raise tax revenue to deal with soaring debts and pay for the ballooning cost of welfare as the population ages, a delay is seen as crucial to support economic growth.

Japan's benchmark Nikkei shares index closed 0.3% higher, with a weaker yen also providing support.

Attention now turns to Wednesday's release of Japanese first-quarter economic growth figures.

Speculation the Federal Reserve could raise borrowing costs sooner rather than later boosted the dollar after data Friday showed US consumer spending jumped far quicker than expected in April, reversing a worrisome stall in the first quarter of the year.

The greenback bought ¥108.78 in the afternoon, up from ¥108.63 in New York.

However, the prospect of another increase in interest rates hit New York traders. All three of Wall Street's main indices ended lower on Friday.