Europe midday: Stocks fall further as inflation fears, China data weigh

European stocks had extended losses by midday on Monday as inflationary worries and sluggish Chinese economic data dampened sentiment.

The pan-European Stoxx 600 was down 2.1% at 421.01, Germany’s DAX was 1.7% lower at 13,444.40 and France’s CAC 40 was off 2% at 6,132.85.

The threat of higher-than-planned interest rate rises has spooked markets in recent days - sparking sell-offs in the US and Asia. Shares in Asia-Pacific were also in the red on Monday, despite Chinese trade data that came in better than expected.

Russia was still in the spotlight as Moscow prepared for Victory Day celebrations commemorating the Soviet Union’s defeat of Nazi Germany in World War II.

A speech from Russia dictator Vladimir Putin was also being monitored for any hint on whether he would announce a victory in his unprovoked war with Ukraine, or escalate the conflict.

"Initial post-Fed optimism was short lived prompting the worst sell-off on Wall Street on Thursday since 2020 with US futures pointing to another down day," said Victoria Scholar, head of investment at Interactive Investor.

"All the major European bourses are under pressure with the FTSE 100 trading below 7,400, driven by weakness in the miners with stocks like Anglo American, Rio Tinto and Fresnillo trading at the bottom of the basket following China’s softer trade data."

Chinese exports in April grew by 3.9% against forecasts for 3.2%, but sharply lower than the 14.7% growth reported in March.

"China’s trade sector accounts for around a third of GDP with the slowdown in exports pointing to a deceleration of international demand with sharp declines from the EU and US as inflation and the cost-of-living take their toll," Scholar said.

Oil prices fell as investors also fretted over the China trade data.

In equity news, shares in real estate website Rightmove fell 4.8% as CEO Peter Brooks-Johnson announced plans to step down after 16 years with the company.

Dutch postal firm PostNL slumped 12.5% after it cut its full-year forecast and reported a 75% drop in core profit, warning that economic uncertainty, growing inflation and pressure on e-commerce volumes make 2022 "more challenging than previously anticipated”.

Germany’s Infineon Technologies was also under the cosh despite lifting its outlook for 2022.