Europe midday: Soft economic data, politics and corporate results weigh on stocks

Investors appeared to react with disappointment to a wave of corporate earnings in Europe, pushing the Stoxx 600 index down to levels not seen in nearly three months.

A total of 53 of the pan-European gauge's constituents reported results on Thursday.

The pan-European benchmark was trading around 1.3% lower early on at 505.92 – it has not closed below this level since 3 May – with losses of 1.1% in Frankfurt, 1.7% in Frankfurt and 2% in Milan.

Weighing on stocks was a downdraft on Wall Street overnight on the back of the latest quarterly numbers out of Alphabet and Tesla, together with election 'uncertainty' in the US.

Weaker-than-expected economic data in Germany acted as a further drag, as did the unresolved political situation in France.

Against that backdrop, a bunch of heavyweight stocks were registering heavy losses across the continent following their latest quarterly earnings, including Nestle, Renault, Stellantis, Kering, and BT Group.

Roche was a rare bright spark, gaining 2% in Zurich after the company upped its profit guidance for the full year following better-than-expected first-half sales.

Another outperformer was Unilever, surging 7% in London after reporting a 4.1% increase in underlying sales in the first half as it held on to full-year guidance.

On the economic side of things, the IFO institute's Business Climate Index for Germany slipped from a reading of 88.6 for June to 87.0 in July (consensus: 88.9).

According to Andrew Kenningham at Capital Economics, the index suggested that Germany's problems were not yet over and pointed instead to a fresh economic downturn.