Europe midday: Stocks in the red as German data disappoints

European stocks edged lower as oil prices retreated and investors digested a weaker-than-expected reading on German business confidence.

At midday, the benchmark Stoxx Europe 600 was down 0.2%, Germany’s DAX was 0.5% weaker and France’s CAC 40 was 0.4% lower.

At the same time, oil prices lost ground as investors booked some profits following recent gains. West Texas Intermediate was down 1.3% to $43.15 a barrel and Brent crude was 1.1% lower at $44.62.

The Stoxx 600 oil and gas index was down 1.1% while the sub-index for basic resources was 2.9% weaker as metals prices declined.

The mood was dampened by the latest data from Munich-based research institute Ifo, which showed German business confidence unexpectedly deteriorated in April.

Ifo’s business climate index printed at 106.6 compared to 106.7 in March and expectations for a reading of 107.

Meanwhile, the current assessment index came in at 113.2 from 113.8 the month before, versus estimates of an unchanged reading.

The expectations index nudged up to 100.4 from 100.0 but was a touch shy of forecasts of 100.8.

Capital Economics said the data added to signs of a slowdown.

“While expectations edged up in April, the current conditions index weakened. And it is somewhat disappointing that sentiment has failed to recover fully from the falls seen at the start of the year, which at the time were widely put down to temporary fears about the global economy.

Investors were also looking ahead to rate announcements from the Federal Reserve and the Bank of Japan on Wednesday and Thursday, respectively.

With the Fed widely expected to stand pat this time, eyes will be on the BoJ amid speculation it might extend its negative rate policy by adopting a policy of negative rates on loans.

On the corporate front, shares in France’s EDF were sharply lower after it announced late on Friday that a capital increase had been approved. On Monday chief executive Jean-Bernard Levy told a French radio station the company would have to press ahead with the nuclear-reactor project at Hinkley Point if it wants to continue to have nuclear power in France.

Philips shares were also under the cosh after the company said its first-quarter profits took a hit from tax charges on the back of its separation of the lighting business.

In London, broadcaster ITV was a high riser as investors snapped up some shares before the stock goes ex-dividend on Thursday to make the most of the 14.1p special dividend.

Still to come on the data front, US new home sales are at 1500 BST.