Europe midday: Equities push lower as German and Chinese data weigh

European stocks were in the red on Tuesday as downbeat Chinese and German data undermined sentiment.

At 1145 BST, the benchmark Stoxx Europe 600 index was down 1.1%, Germany’s DAX was down 1% and France’s CAC 40 was 1.3% weaker.

Figures from the world’s second-largest economy set the tone early on, showing dollar-denominated exports in China dropped 3.7% in September from a year earlier, while imports fell 20.4%, marking their eleventh consecutive month of decline. Exports were better than expected but imports were weaker, raising doubts over domestic demand.

“While Chinese exports posted a healthy rebound, weak imports are still indicating that the Chinese economy is continuing to struggle,” said Markus Huber, senior analyst at Peregrine & Black.

The Stoxx Europe 600 basic resources took a hit, slumping 2.2% as worries about China – a major consumer of metals – gathered pace.

German data added to the negative mood, as it showed investor confidence fell to its weakest level in a year.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations declined from 12.1 in September to 1.9 in October, marking the seventh consecutive decline and falling short of the 6.5 reading analysts expected.

Germany has endured a turbulent couple of weeks, with the Volkswagen emission scandal wiping 3.5% off the country’s benchmark index in the two days after the car maker admitted fixing emission tests for over 11m vehicles.

ZEW’s gauge for current conditions in Germany fell from 67.5 to 55.2 in October, while the sub-index tracking business expectations in the Eurozone declined from 33.3 to 30.1.

“In all, today’s survey supports our view that German growth is likely to slow in the coming months and we expect a gain of around 1.5% this year to be followed by a slowdown to 1.2% next year,” said Capital Economics.

On the corporate front, luxury goods group LVMH slid following a mixed set of third-quarter results.

Volkswagen was also on the back foot after saying it will cut investment by €1bn a year and accelerate its cost-cutting programme as it makes changes to the diesel technology used in its cars in the wake of the emissions scandal.

Banks were in focus, with Credit Suisse and UBS under pressure following reports that Switzerland’s finance ministry will require the country’s biggest banks to have capital equal to around 5% of their total assets.

Still, there were a few bright spots. SABMiller shares shot higher after an agreement in principle to a possible £44 per share takeover offer from Anheuser-Busch InBev.

Shares in German software company SAP rallied after it reported better-than-expected third-quarter sales and operating profit.