Europe close: Stocks little changed after Eurozone PMI, UK inflation

European stocks were little changed as investors weighed data on UK inflation and Eurozone manufacturing and services.

UK inflation fell to zero in February, after registering a 0.3% gain the previous month, worse than the 0.1% increase that was predicted. The Bank of England is targeting inflation of 2%.

“With inflation hitting zero in February, the UK is on the cusp of deflation,” said Vicky Redwood, chief UK economist at Capital Economics.

"But a brief period of gently falling prices driven by lower energy prices is nothing to be feared – in the UK, at least, deflation will be a good thing for the economy."

Markit’s flash purchasing managers’ index (PMI) Eurozone composite, which includes manufacturing and services activity, rose to a 46-month high of 54.1 in March, from 53.3 in February. Analysts had expected a reading of 51.5. A level below 50 signals a contraction while a reading above that indicates expansion.

“The improvement provides welcome news to a region awaiting signs that the ECB’s quantitative easing is stimulating the real economy,” said Markit's chief economist, Chris Williamson. “The region’s GDP looks to have expanded by 0.3% in the first quarter, buoyed by a 0.4% expansion in Germany and signs of a long-awaited recovery in France.”

In China, manufacturing activity contracted, sending commodity producers lower. HSBC’s PMI for manufacturing fell to 49.2 in March from 50.7 the prior month, missing forecasts for a reading of 50.5.

Greek reforms

Greece has promised to deliver a list of solid reforms by Monday to unlock further aid from creditors.

German Chancellor Angela Merkel met with Greek Prime Minister Alexis Tsipras in Berlin on Monday to discuss what to do about Greece’s debt.

European Parliament chief Martin Schulz told Italy’s La Repubblica he expects Greece and its creditors could clinch a deal by the end of the week that would release further aid.

Sources told Reuters that Greece risks running out of cash by 20 April unless it secures more financial backing.

The euro fell 0.26% to $1.0918.

Airlines slide after French crash

Deutsche Lufthansa AG declined after an aircraft of its subsidiary Germanwings crashed in the Digne region of southern France.

Danske Bank A/S jumped after Citigroup recommended buying the stock.

Hennes & Mauritz AB edged lower as the fashion retailer warned the strong dollar will add to purchasing costs this year.

In commodities, Brent crude fell 0.666% to $55.55 per barrel, according to the ICE.