Europe midday: Shares trim gains on EZ PMI data; AstraZeneca slumps

European shares trimmed gains at midday as further evidence that China’s economic recovery was stalling and a steeper contraction in eurozone manufacturing activity last month hit sentiment.

The pan-European Stoxx 600 index was up 0.19% with all regional markets higher.

Activity in China’s manufacturing sector slowed in June, according to data released on Monday. The Caixin/S&P Global manufacturing purchasing managers’ index fell to 50.5 from 50.9 in May, although this was above consensus expectations for a reading of 50.0.

A reading above 50.0 signals expansion, while a reading below indicates contraction.

Wang Zhe, senior economist at Caixin Insight Group, said: "A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, as prominent issues including a lack of internal growth drivers, weak demand and dimming prospects remain.

Eurozone manufacturing activity contracted faster in June than a flash estimate in response to the European Central Bank's tightening of monetary policy, which in turn squeezed access to finance, according to a survey published on Monday.

The S&P Global final manufacturing Purchasing Managers’ Index (PMI) fell to 43.4 from May’s 44.8, its lowest since the Covid pandemic was cementing its grip on the world, below a preliminary reading of 43.6.

A mark of 50 separates growth from contraction.

In the UK, the downturn in the domestic manufacturing sector deepened in June. The S&P Global/CIPS manufacturing purchasing managers’ index declined to a six-month low of 46.5 from 47.1 in May. This marked the 11th month of contraction, although it was above the flash estimate of 46.2.

The survey showed that all five of the subcomponent indices - output, new orders, stocks of purchases, employment and suppliers' delivery times - were at levels consistent with weaker operating conditions.

In equity news, shares in Generali were up 5% after Delfin was authorized to hold a more-than 10% stake in Italy's biggest insurer.

Tesla's Frankfurst-listed shares were also higher after the electric car maker beat second-quarter delivery estimates.

AstraZeneca shares fell as results from a high-level study of a new cancer medicine raised worries the drug might not work as well as anticipated.

Miners also shone, with Anglo American, Rio Tinto, Glencore and Antofagasta all higher as base metals prices rose.

Reporting by Frank Prenesti for Sharecast.com