Europe midday: Shares extend losses as investors turn to US CPI

European shares extended losses at midday on Wednesday after a weak session in Asia as investors worried about the possible imposition of tariffs by the new US administration, while eyes were also on inflation data from across the pond.

The pan-regional Stoxx 600 index was down 0.26% and nudging the 500 threshold with all major bourses now lower.

A rally sparked by so-called “Trump trades” – effectively betting on business-friendly policies once Donald Trump is in power – had largely run out of steam on Tuesday. Market bets on the US Federal Reserve cutting rates at its December meeting have started to fall on fears the new leader’s policies will be inflationary.

“China’s economy continues to be a worry, with the authorities’ attempts to inject the economy with stimulus seen as underwhelming. The impact of a second Trump term and its implications for global trade is also being mulled over.” said Hargreaves Lansdown analyst Susannah Streeter.

“The hot enthusiasm which powered Wall Street higher following Trump’s re-election has cooled off. Investors are assessing the realities of governing for Trump’s second term, while the control of the House of Representatives is yet to be decided, with critical votes still being counted.”

In equity news, shares in Just Eat Takeaway surged as the online fast-food delivery platform sold its Grubhub unit to Wonder in a deal valued at $650m.

Smiths Group also jumped after raising growth and margin guidance and beefing up its share buyback programme following an "outstanding" first quarter.

Specialist engineering group Dowlais was up 10% after saying year-to-date trading was in line with expectations and that its full-year outlook remained unchanged.

Reporting by Frank Prenesti for Sharecast.com