(Corrects Bund yield in 6th paragraph)
LONDON, April 18 (Reuters) - European stocks and the euro were hit on Thursday after a business survey showed the German manufacturing sector contracted for the fourth month in a row, adding to concerns around the sector and pushing investors into the safety of euro zone government bonds.
Activity in Germany's services sector rose to a seven-month high in April, a survey showed on Thursday, but investors focused on the 44.5 reading for the manufacturing sector, well below the 50.0 mark separating growth from contraction even if it was above than the 44.1 reading recorded last month.
The euro tumbled a quarter of a percent to the day's low at $1.1265 after the data. It was up as much as 0.1 percent at $1.1304 before the data.
The euro-zone stocks index and Germany's DAX fell sharply to their lowest for the day after the German data, which followed shortly after weaker-than-expected French manufacturing PMI reading.
At 0735 GMT, the index was down 0.3 percent and Frankfurt stocks were down 0.2 percent.
German 10-year bond yields, meanwhile, were three basis points lower at 0.05 percent, dropping further off Wednesday's high of 0.10 percent. (Reporting by Abhinav Ramnarayan; Editing by Saikat Chatterjee)