Europe midday: Shares slide into red on weaker banking stocks

European shares were pulled into the red by midday on Friday as banking stocks fell out of favour and despite the eurozone defying expectations that it would enter recession due to the Ukraine war and higher energy prices.

The benchmark Stoxx 600 index was down 0.38% with all most major bourses in the red. Asian stocks closed higher overnight as the Bank of Japan held interest rates at 0.1% and announced a review of its easing policy.

Data from the EU’s statistical agency Eurostat showed that growth in the single currency bloc stood at 0.1% in the first three months of 2023.

US futures indicated a weaker opening after tech giant Amazon reported disappointing results.

“Amazon disappointed investors last night as it signalled cloud growth is slowing this quarter, as corporations trim spending. The recent slew of positive noise around cloud growth from Amazon’s tech peers make comparisons particularly tricky, and the commentary meant the group gave up the impressive gains initially sparked by the results, with the shares settling 2% down in after-hours trading," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"US futures lost some of their spark after the close, driven by further earnings announcements which highlighted a very mixed bag. Snap, the owner of filter-app favourite, snapchat, fell 18% as it announced its first ever decline in quarterly revenue. Changes to ad tools have hit the group hard, at a time when it’s already peddling very hard to compete with eyeballs over the likes of TikTok and Instagram.

In other equity news, shares in German media group ProSieben slumped after the company said it was slashing its dividend and replaced its chief financial officer.

Shares in UK bank NatWest were lower despite reporting forecast-busting first-quarter results and maintaining guidance.

Electrolux, Europe's biggest home appliances maker, surged after reporting a smaller-than-expected operating loss for the first quarter, boosting hopes a turnaround in North America may be taking hold.

Mercedes-Benz edged ahead as the vehicle maker lifted its outlook for the annual adjusted return on sales of its vans division to 11%-13% from 9-11% previously.

Reporting by Frank Prenesti for Sharecast.com