Europe midday: Shares slip into red on rate worries; Chatbot fears chew Pearson

European shares slid into the red on Tuesday after the Reserve Bank of Australia unexpectedly hiked rates ahead of a week of central bank policy decisions and as JP Morgan agreed to buy First Republic Bank assets in a bid to boost confidence in the banking sector.

The pan-regional Stoxx 600 index was down 0.14% with all major bourses lower. Germany’s DAX fell as Europe’s biggest economy reporting a surprise 2.4% fall in retail sales in March.

Eyes will turn to the US Federal Reserve on Wednesday, where a 25 basis points rise is expected, and a policy decision from the European Central Bank on Thursday.

In economic news, eurozone inflation edged higher in April as energy prices rose, but core inflation unexpectedly eased, according to data released on by Eurostat.

Headline consumer price inflation rose to 7% year-over-year from 6.9% in March, in line with consensus estimates.

Meanwhile, core inflation - which excludes food, alcohol, tobacco and energy - ticked down to 5.6% in April from 5.7% the month before. Analysts had been expecting it to be unchanged.

Corporate earnings continued aplenty, with HSBC shares up as Europe's largest bank reinstated its dividend after beating first-quarter profit expectations and also announced a new cycle of share buybacks for up to $2bn.

Shares in education publisher Pearson slid after US firm Chegg, which provides online guidance for students preparing tests, warned over the impact of AI chatbots on its homework-help services.

BP shares fell after the UK oil giant posted a $5bn profit in the first quarter but cut back its share buyback programme.

Logitech shares gained after its results were well received, but AMS-Osram stock fell as quarterly earnings disappointed.

Electrolux shares topped the risers after reports of an approach from China's Midea Group for a potential acquisition of the Swedish brand.

Reporting by Frank Prenesti for Sharecast.com