Europe midday: Shares down on AI worries, weak EZ survey data

(Sharecast News) - European shares were weaker across the board as investors eyed rate announcements from across the continent along with US data, while a weaker Wall Street and eurozone business activity survey performance weighed on sentiment.

The pan-European Stoxx 600 was down 0.19% to 581 at 1204 GMT with all major continental bourses lower.

In the US, major indices closed lower on Monday as artificial intelligence names traded lower ahead of the publication of a number of major US economic reports this week.

AI stocks weighed on Monday, with Broadcom and Oracle leading declines, down more than 5% and 2%, respectively, as last week's rotation away from the sector continued. Traders instead shifted into economically sensitive areas, picking up consumer discretionary and industrial names, while healthcare stocks also saw increased demand.

Multiple key US economic data points will be released this week, with delayed reports set to be published following the autumn government shutdown.

November's non-farm payrolls figures will be published later on Tuesday alongside October retail sales data, while November's consumer price index will be released on Thursday. The reports will provide investors with fresh insight into the state of the US labour market, consumer spending and inflation trends heading into yearend.

"Time is running out for any hopes of a Santa rally, as investors continue to fret about the AI trade, which for the moment has fallen sharply out of fashion," said Interactive Investor head of markets Richard Hunter.

"The rotation into what are seen as relatively stable sectors compared to the previous AI euphoria rumbles on, to the benefit of the likes of industrials, consumer discretionary and healthcare."

In economic news, growth in eurozone business activity eased more than expected in December, to a three-month low, according to a survey released on Tuesday.

The HCOB flash eurozone composited PMI, which is compiled by S&P Global, fell to 51.9 from 52.8 in November. It remained above the 50.0 mark that separates contraction from expansion but was below economists' expectations for a reading of 52.7.

The flash manufacturing purchasing managers' index declined to 49.2 in December from 49.6 the month before, while the services PMI business activity index fell to 52.6 from 53.6.

In equity news, shares in IG Group rose as it extended its share buyback and said it was confident of achieving medium-term revenue growth targets ahead of schedule.

Defence stocks were down on news that Ukraine President Volodymyr Zelenskyy said proposals negotiated with US officials on a peace deal to end Russia's war in his country could be finalised within days, after which American envoys will present them to the Kremlin. Saab, Hensoldt, Renk, Leonardo, Rheinmetall, Thales and BAE were all lower on the news.

Reporting by Frank Prenesti for Sharecast.com