Europe midday: Shares slip as investors digest NRW inflation print, Sentix

European shares slipped into the red at midday on Wednesday as investors eyed German inflation numbers later in the day along with survey data on the continent's biggest economy.

The pan-European Stoxx 600 was down 0.2% after a strong rally late on Tuesday as US jobs data missed expectations, but spurred hopes that costs in the world’s largest economy might be slowing.

‘’What appears to be bad news for the US economy is being notched up as good news for equities with a weakening jobs snapshot and slide in consumer confidence lifting indices,” said Hargreaves Lansdown analyst Susannah Streeter. “Signs of America’s cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes.”

In a data-heavy day, economic sentiment in the eurozone fell a touch more than expected in August, according to a survey released on Wednesday.

The Sentix economic sentiment indicator fell to 93.3 in August from 94.5 in July, versus expectations for a reading of 93.7.

Pantheon Macroeconomics said: "The ESI paints the same picture as the PMI; the downturn is intensifying and it is spreading from manufacturing to other sectors. We already knew that consumer confidence fell, today we learnt that this was driven by households’ bleaker outlook for their personal financial situation and for the economy as a whole.

In Germany, inflation in the state of North Rhine Westphalia rose to 5.9% from 5.8% year-on-year, and +0.5% on a monthly basis, better than expected.

"The overall picture won’t be clear until lunch but this reading is a good guide for the national story. That’s nudged up expectations the European Central Bank will hike rates once more next month. So near-term at least some central bank divergence expected with the data pointing to a Fed pause and an ECB hike in September," said Markets.com analyst Neil Wilson.

Meanwhile in Spain, headline inflation climbed by 0.3 percentage points in August, to 2.6% year on ear, matching the consensus.

In the UK, data from the Bank of England showed mortgage approvals and consumer lending both declined in July as elevated interest rates and the rising cost of living continue to wreak havoc with personal finances.

Net mortgage approvals (meaning, approvals minus cancellations) fell to 49,400 last month, from 54,600 in June. The figure was broadly in line with economists' expectations.

In equity news, insurer Prudential gained after posting a higher first-half operating profit, while sector peer Direct Line rose 1% after naming Aviva executive Adam Winslow as its new CEO.

Energy stocks were up on the back of higher oil prices, but Denmark’s Orsted plunged by a fifth after the wind farm developer revealed it could take a massive hit on its US portfolio.

Real estate company Aroundtown surged on strong interim results, while Swiss train maker Stadler Rail was also up after reporting a strong rise in orders and cash flow for the first half of the year.

Reporting by Frank Prenesti for Sharecast.com