Europe midday: Stocks in the red as autos skid

European stocks were maintaining losses by midday, with auto issues under the cosh as investors digested the latest data on the eurozone manufacturing and services sectors.

The Stoxx Europe 600 index was down 0.4%, while Germany's DAX and France's CAC 40 were both off 0.6%.

Autos were under pressure after the EU antitrust body confirmed it is investigating allegations of collusion between the big car manufacturers over diesel emission treatment systems and cost agreements. The Stoxx 600 autos and parts index was down 2%.

On the data front, surveys released by from Markit showed eurozone services and manufacturing sector growth remained strong in early July, though both came in slightly less strong than expected.

A preliminary, or 'flash', euro area manufacturing purchasing managers' index for July showed a slight easing back to 56.8 from 57.4 in June, falling short of the consensus forecast of 57.2.

The eurozone manufacturing PMI was at its lowest since January, but still well up on the 50.0 reading that separates growth from contraction.

The eurozone services PMI for July, also produced by Markit, remained at 55.4 for a second month, though the market had expected it to improve slightly to 55.5.

The headline composite PMI declined to 55.8 from 56.3, below the consensus forecast of 56.2.

Economists said the composite PMI looks consistent with quarterly gross domestic product growth of about 0.6% for the eurozone.

Oanda anlyst Craig Erlam said: "While the numbers may suggest momentum is slowing, they all remain well above the 50 level that separates growth from contraction. The fact that the euro has slipped a little in response to these numbers may also be a reflection of the fact that it is trading at a near two year high against the dollar and was therefore prone to a little profit taking.

"A move through 1.1714 in the pair would see it trade at its highest level since the start of 2015 and potentially trigger another sharp move higher."

At midday, the euro was down 0.4% against the pound at 0.8937 and 0.1% weaker versus the dollar at 1.1651.

Investors were also mulling over news that the International Monetary Fund has downgraded its economic growth forecasts for the UK and the US this year. It cut its UK growth expectations to 1.7% from 2% and its estimate for the US to 2.1% from 2.3% earlier.

In corporate news, Ryanair flew lower despite reporting a jump in profit for the three months to the end of June, after the budget carrier warned it could cut fares by up to 9% on some routes as competition in the industry intensifies.