Europe midday: Shares lower as EZ GDP stalls

European shares were lower on Thursday as investors digested data showing growth in the eurozone had stalled.

The pan-European Stoxx 600 index was off 0.12% at 468.12 with all regional bourses lower. Europe’s economy stalled in the third quarter, official data showed on Thursday, leaving it a risk of recession.

According to Eurostat, the statistical office of the European Union, GDP decreased by 0.1% in the Eurozone compared to the second quarter, when it inched up 0.1%.

The final figure matched Eurostat’s initial estimate and consensus.

Year-on-on year, GDP was 0.0% in both the Eurozone and across the wider bloc. Analysts had been expecting a marginal rise, of 0.1%, in the Eurozone.

EU-wide GDP was also flat annually compared to the second quarter, when it inched up 0.1%.

“European markets are under pressure, taking their cues from a softer session on Wall Street with the S&P 500 logging three straight negative sessions," said Victoria Scholar, head of investment at Interactive Investor.

In other economic news, German industrial production unexpectedly fell by 0.4% in October compared to the previous month, according to official data published on Thursday.

The fall compared with expectations of a 0.2% rise, and was mainly due to a 0.6% decline in mechanical engineering sector output, the office said.

The data follows a shock fall in German industrial orders in October, down 3.7% on the previous month on a seasonally and calendar adjusted basis, data showed on Wednesday. Outside of manufacturing, energy output jumped by 7.1% and construction slid by 3.4%.

In equity news, Air France-KLM fell after JPMorgan cut the stock to underweight, from overweight and slashed its price target to €9.50 from €21.50. The move also hit Lufthansa and British Airways’ parent company IAG.

Deutsche Bank downgraded its ratings for Swatch Group and Ferragamo as it slashed target prices across the luxury sector, saying that "demand [will] remain challenging in early 2024".

China-sensitive stocks such as Burberry and Prudential were also under pressure key China trade data pointed to weak domestic demand from the world’s second largest economy. Imports dropped by 0.6%, missing estimates for growth of 3.3%.

Shares in Future slumped after full-year revenues were hit by weaker trading in the US.

Reporting by Frank Prenesti for Sharecast.com