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FRANKFURT, Germany — A key indicator of business sentiment in Europe unexpectedly fell deeper into recession territory Thursday, compounding concerns about the global recovery following signs of slowing manufacturing in China.

Major stock indexes in Europe slipped and the euro fell against the dollar after a survey of purchasing managers suggested that growth in the eurozone shrank during the first three months of the year. That would be the second negative quarter in a row, meeting the definition of a recession.

The data suggests that the 17-nation euro area is still struggling even after a flood of cash from the European Central Bank helped assuage anxiety about a major banking crisis and credit crunch.

“The easing of the sovereign debt crisis has apparently failed to bring about a lasting improvement in business sentiment,” said Christoph Weil, an economist at Commerzbank, in a note to clients.

In China, weak external and domestic demand continued to weigh on the manufacturing sector in March, a survey released Thursday showed, raising expectations that the Chinese authorities would step up measures to revive economic momentum.

The survey of purchasing managers in the vast Chinese factory sector, released by HSBC, showed that activity had shrunk in March, for the fifth month in a row, as the Chinese economy felt the pain of feeble global economic activity.

China has become a major market for European products ranging from heavy machinery to luxury goods, so a slowdown there adds to problems in Europe.

The preliminary reading in the China survey for March dropped to 48.1, from 49.6 in February, HSBC said. Readings below 50 signal contraction, and even though the reading provides only an early insight into this sector of the Chinese economy, the drop came as a disappointment.