Europe midday: Shares slide into red on UK GDP data

(Sharecast News) - European stocks slipped into the red at midday on Friday as data from the UK showing the economy flatlined in July hit sentiment.

The pan-regional Stoxx 600 index was down 0.15% at 554as of 11.40 BST with most major bourses higher except the UK's FTSE 100, which gained 0.30%.

Official data showed that the U.K. economy recorded zero growth in July after a 0.4% economic expansion the previous month.

"Overall, growth in the UK economy slowed in the three months to July, and production was the weak point. The falls in production were broad based, according to the Office for National Statistics, which suggests that a mixture of tariff concerns and a higher tax burden for business is now having a material effect on the economy," said XTB research director Kathleen Brooks.

"If the third quarter is not going to be a disaster for the UK economy, then growth in August and September will need to do the heavy lifting."

"The pound is extending losses on this news and is eroding some of Thursday's gains. For now, GBP/USD is hanging on to $1.3550, however, if bond yields start to rise on the back of this data, then we could see pound weakness later on Friday. The pound is the third worst performer in the G10 FX space so far today."

In corporate news, shares in online retailer and warehouse tech provider Ocado slumped after a read-across from comments made by US grocer Kroger - with whom the UK company partners on warehouses - that it could offer delivery in less than two hours from 97% of its stores, adding that the supermarket operator was well positioned to offer customers faster times because of its "conveniently located store network,".

Morgan Stanley analysts indicated the comments could put some of Ocado's existing warehouses at risk, Bloomberg reported.

Meanwhile, in Spain, the board of lender Sabadell unanimously recommended the bank's shareholders reject a hostile takeover bid from domestic peer BBVA.

Shares of Vestas Wind fell after US Interior Secretary Doug Burgum said offshore wind would not be used as a source of electricity under President Donald Trump's leadership.

Reporting by Frank Prenesti for Sharecast.com