Europe midday: Shares extend losses ahead of US data

European shares extended losses on Thursday, tracking sharp falls on Wall Street overnight as trading started to wind down for the Christmas break.

The pan-European Stoxx 600 index was down 0.56% at 475.28 with all major bourses lower. Investors and traders are looking ahead to a GDP index reading and the personal consumption expenditures price index - a closely followed gauge of inflation.

Economists expect the U.S. economy to post 5.2% year-on-year growth in the third quarter, while the personal consumption expenditures price index is expected to climb 2.3% in the same period.

In Britain, official figures showed government borrowing excluding public sector banks came in at £14.3bn. This was below November 2022’s £15.2bn but above consensus forecasts of £13bn. It also marked the fourth highest November borrowing since monthly records began in 1993.

Debt interest payments for November surpassed all monthly November figures on record since 1997, coming in at £7.7bn.

“UK markets are unlikely to take any comfort from the news that November’s UK budget deficit of £14.3bn was £1.4bn ahead of consensus. This may also limit messrs Sunak and Hunt’s wiggle room to hand out further sweetners ahead of elections expected next year. The FTSE 100 has opened back below 7,700 after posting a 1% gain yesterday," said Derren Nathan, head of equity research at Hargreaves Lansdown.

"This follows the biggest day of losses since October for US indices. With broad based falls across all sectors there was little shelter for traders. Both the Nasdaq Composite and S&P 500 were down 1.5%. The move was driven by relatively light trading volumes. With the US markets still at close to record highs, this optimism is showing signs of fragility."

On a day thin on any major corporate news, Vodafone shares made small gains on a report that Swisscom is weighing a possible offer for the telecom operator's Italian business next year.

Reporting by Frank Prenesti for Sharecast.com