- Europe's PMI contracts, data shows
- Deadline looms for Cyprus to reach bailout plan
- Federal Reserve assures continued stimulus

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European equities plunged Thursday as economic data revealed a contraction in business activity in the region and Cyprus worked on a new plan to obtain a bailout from the bloc.

A purchasing managers' index showed a decline to 46.5 in March from 47.9 in February, according to Markit Economics.

It fell more than the average 48.2 reading analysts had predicted and signalled a setback in the Eurozone's economic recovery.

Europe's biggest economy, Germany, fell to 51 in March from 53.3 in February - the lowest reading in three months.

No less encouraging for Europe's growth is the financial crisis in Cyprus. The country must find a way to raise £5.8bn to qualify for financing support from the European Union.

A proposal for a levy on bank deposits was rejected and now leaders are searching for an alternative, including turning to Russia for aid.

The European Central Bank has warned that it would cut off emergency liquidity for Cypriot banks on Monday unless a deal was reached to shore up the country's ailing banks.

Eurozone finance ministers will hold a conference call at 19:00 local time to discuss the situation, Dutch Finance Minister Jeroen Dijsselbloem said.

Federal Reserve assures continued stimulus

The Federal Reserve and its President Ben Bernanke has said that the US economy remains too weak to pull back on its $85bn per month stimulus package.

While the latest economic data points to an improved US economic outlook, the conundrum was that the "good news" could have prompted the Fed to cut off stimulus measures earlier than expected.

However, the Fed reiterated its commitment to buy bonds and mortgage-backed securities until the jobs market improves substantially.

In separate economic data, sales of previously owned houses in the US rose in February to the highest level in more than three years.

Purchases climbed to a 4.98m annualised rate, the most since November 2009, figures from the National Association of Realtors showed Thursday in Washington.

NEXT reveals annual profit rise

Shares in British retailer NEXT soared after the company posted a rise in annual profits on the back of expansion and an increase in online sales.

Lanxess retreated after the chemical maker said it expects earnings will fall in the current quarter.

SAP slumped after the US enterprise software maker said its corporate customers reduced their spending on software.

Other asset classes slide

The euro/dollar fell by 0.19% to the 1.0240 dollar level.

Front month Brent crude future dropped by 0.853 dollars to the 107.820 dollar mark on the ICE.

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