Europe midday: Stocks rangebound on mixed data, US shutdown fears

(Sharecast News) - European stocks stalled at a two-week high on Tuesday as investors digested a mixed batch of economic data and weighed concerns that the US government could be heading towards a possible shutdown.

The Stoxx 600 was more or less flat after finishing the previous session at 555.53, its highest level since 15 September and within a whisker of the record close of 563.13 reached in March.

Markets across the continent were searching for direction, with very little separating intraday highs and lows, as fears about a possible US government shutdown limiting upside. Stock futures were pointing to a weaker start on Wall Street, while gold prices hitting new highs as the dollar weakened.

"Relations between the Democrats and Republicans are frostier than an Alaska morning, so markets are not confident on the prospects of agreeing a deal before midnight tonight," said AJ Bell investment director Russ Mould. "One of the biggest short-term concerns for markets is the impact this would have on the release of government data - particularly the jobs number due on Friday - without which the Federal Reserve might not feel as confident about cutting interest rates."

Back on this side of the Pond, UK GDP was estimated to have grown by 0.3% in the second quarter, following an unrevised 0.7% uplift in the first quarter and in line with market forecasts. Year-on-year, GDP rose by 1.4%, ahead of forecasts for a 1.2% increase.

German retail sales unexpectedly fell 0.2% in August following a revised 0.5% decline in July, Destatis said. This missed the consensus estimate for a 0.5% increase and marked the fourth fall in five months.

Meanwhile, the annual rate of French inflation picked up to 1.1% in September, according to preliminary estimates, up from 0.8% in July but under the 1.3% rate expected by the market.

Looking further afield, the RatingDog China manufacturing purchasing managers' index hit a six-month high of 51.2 in September, up from 50.5 in August and comfortably ahead of the 50.3 consensus forecast.

Market movers

Shares in Asos dropped more than 10% after the London-listed online retailer said full-year revenues had come in "slightly below" market expectations and adjusted underlying earnings were at the bottom end of guidance.

Heading the other way were sportswear brands Adidas and Puma, which were among the best performers on the Stoxx 600 ahead of sector giant Nike's fiscal first-quarter earnings due out later on.

Meanwhile, Pandora fell after the Danish jewellery company announced that current boss Alexander Lacik is leaving after nearly seven years, to be replaced by CMO Berta de Pablos-Barbier.

Deutsche Lufthansa was also lower, a day after its parent company Lufthansa Group announced 4,000 job cuts over the coming years to improve profitability. The airline is now also facing a pilot strike with union members planning to walk out over a pensions dispute.