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Europe midday: Stocks reel after weak

Fri 14 December 2018 11:34 | A A A

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6943.31 | Negative 27.28 (0.39%)
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(Sharecast News) - Stocks on the Continent are reeling following a double helping of negative news on the economy out of the single currency bloc and from Asia on Thursday morning.

According to survey compiler IHS Markit, economic growth in the Eurozone slowed to its weakest pace in four years at the end of 2018, even as data released overnight in China revealed much weaker-than-expected prints for industrial output and retail sales in the Asian giant that stoked renewed speculation of imminent interest rate cuts by policymakers in Beijing.

Commenting on the former, Michael Hewson at CMC Markets UK said: "Today's flash PMI numbers from France and Germany for December have put into sharp contrast the ECB's decision to stop its asset purchase program at the end of this month.

"If ECB President Mario Draghi is correct as he said yesterday, that QE has been the only driver of recovery in certain parts of the euro area, surely you have to question the wisdom behind the decision to not only reduce but to end it.e Continent."

As of noon, the benchmark Stoxx 600 was trading lower by 0.93% or 3.26 points to 346.16, alongside a drop of 1.03% or 114.11 points to 10,810.39 for the Dax, while the FTSE Mibtel was off by 1.20% or 229.36 points at 18,818.14.

Weighed down by those very weak survey readings, euro/dollar waS 0.69% lower at 1.2848.

IHS Markit's preliminary euro area composite output index, which covers both manufacturing and services, dropped from a reading of 52.7 for November to 51.3 in December (consensus: 53.0).

In parallel, the services sector Purchasing Managers' Index dropped from 53.4 to 51.4 (consensus: 53.4).

"Companies are worried about the global economic and political climate, with trade wars and Brexit adding to increased political tensions within the euro area. The surveys also point to further signs that the struggling autos sector continued to act as a drag on the region's economy," said IHS Markit's Chris Williamson.

On the corporate side of things, stock in French luxury goods maker LVMH was trading on the back foot after the company announced the purchase of hotel operator Belmond for $3.2bn.

Over in Germany meanwhile, digital classifieds outfit Scout24 jumped after the FT reported that the company might be taken private.

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