Europe midday: Stocks drop as investors wade through earnings, data

European stocks fell on Friday, as investors weighed up encouraging news on Eurozone growth and employment against evidence the bloc was falling further into deflation, amid a deluge of corporate news.

At midday, the benchmark Stoxx Europe 600 index was down 1.3%, Germanys’ DAX was off 1.4% and France’s CAC 40 was 1.7% weaker.

Stocks kicked off the session by taking their lead from the US, where shares ended lower on Thursday as Apple slid after billionaire activist Carl Icahn said he had sold his entire stake in the company.

Oil prices advanced, supported by a weaker dollar. West Texas Intermediate was up 1.1% to $46.55 a barrel and Brent crude was 0.5% firmer at $48.40.

According to Eurostat, the Eurozone unemployment rate nudged down to 10.2% from 10.4% in February and 11.2% in the same month last year. This marked the lowest rate in the bloc since August 2011.

Economists had been expecting the rate to remain unchanged at 10.3%, which was what it was first estimated at for February.

Pantheon Macroeconomics said this was “a much welcome and surprising decline” in the Eurozone unemployment rate.

“Taken at face value, today’s data indicate that the cyclical recovery remains on track, lifted by domestic demand, and that the labour market continues to improve as a result.”

Eurostat’s preliminary flash estimate of gross domestic product for the region was also encouraging, showing seasonally-adjusted first-quarter GDP rose 0.6% compared with the previous quarter when it grew 0.3%. This was stronger than the 0.4% growth pencilled in by economists.

On a year-on-year basis, seasonally-adjusted GDP was unchanged, up 1.6%, versus expectations for a nudge down to 1.5%.

On the downside, consumer prices declined 0.2% on the year in April, having been steady in March. This was a bigger drop than the 0.1% forecast by economists, with energy prices proving to be the biggest drag as they slid 8.6% on the year.

On the corporate front, AstraZeneca reversed earlier losses to nudge higher after reporting a drop in first-quarter earnings but a rise in revenue as core research and development costs increased, reflecting recent acquisitions.

Sticking with pharmaceuticals, Sanofi was lower despite saying first-quarter sales rose and maintaining its full-year guidance, while peer Novo Nordisk nudged down after cutting its 2016 guidance.

Royal Bank of Scotland was under the cosh after it said first-quarter losses more than doubled to £968m after it paid out a £1.2bn dividend to the UK government.

Education published Pearson slipped after posting a decline in first-quarter sales.

British Airways and Iberia parent International Consolidated Airlines flew lower. Although the company reported a jump in first-quarter pre-tax profit, it said demand for flights had been hit by the Brussels terror attacks and the upcoming EU referendum.

Shares in Spanish phone company Telefonica were in the red after it said first-quarter profit slumped due to the impact of currency movements while Swiss Re dropped despite posting better-than-expected first-quarter profits.

Danske Bank gained ground after its first-quarter pre-tax profit came in ahead of analysts’ expectations.

Still to come, US personal income and spending is at 1330 BST, Chicago PMI at 1445 BST and University of Michigan consumer sentiment at 1500 BST.