Europe midday: Equities slip into the red as auto sector skids

European equity markets slipped into the red on Monday as the rally sparked by Friday’s bumper US jobs data lost steam, with auto stocks under pressure.

At midday, the benchmark Stoxx Europe 600 index was down 0.3%, Germany’s DAX was 0.4% lower and France’s CAC 40 was down 0.5%.

“Typical for a Monday there are very few economic and corporate data scheduled to be released pointing towards a mix of slight profit-taking and range-trading what markets are concerned. Overall sentiment remains positive with traders preferring to buy dips,” said Markus Huber, senior analyst at broker Peregrine & Black.

Friday's impressive jobs report from the Bureau of Labour Statistics was still reverberating around trading desks. US non-farm payrolls were shown to have risen by 271,000 in October, surging past the 180,000 gain expected by economists.

The unemployment rate, meanwhile, edged lower by a tenth of a percentage point to 5.0%, as the participation rate held steady at 6.24%, leading to a further surge in the dollar and a shortening of the odds on a December US rate hike.

News form the Organisation for Economic Co-operation and Development did little to lift the mood, as it trimmed its global growth forecast for the year to 2.9% from 3% and said a sharp slowdown in global trade due to China’s woes poses a risk to economic growth.

On the corporate front, InterContinental Hotels was the standout loser on the FTSE 100 after the Holiday Inn owner denied recent media speculation and said it was not considering a potential sale or merger of the company.

Continental AG slumped despite raising its full year profit outlook and posting a jump in third quarter sales.

Beleaguered German car maker Volkswagen slipped after engineers admitted they had manipulated carbon dioxide emissions data because goals set by former chief executive Martin Winterkorn were too difficult to achieve.

Renault dropped as French prime minister Manuel Valls said over the weekend that the government did not want a merger between the car maker and its Japanese partner Nissan.

Continental slid, with investors booking profits after the tyre company nudged up its full year outlook following higher third quarter earnings.

Tullow Oil bucked the trend, surging after AP Moeller-Maersk A/S agreed to buy half of Africa Oil Corp.’s shares in licenses in Kenya and Ethiopia, where Tullow operates some blocks.

Beleaguered platinum miner Lonmin was also in the black after launching a $407m (£270m) rights issue. Although the issue was at a 94% discount to its share price last week, the company had already warned of a significant discount.