Europe midday: Stocks nudge lower in choppy trade; Anglo American tumbles again

European stocks slipped in choppy trade as investors mulled over disappointing German data and more signs that China’s economy is flagging.

At midday, the benchmark Stoxx Europe 600 index was down 0.2%, France’s CAC 40 was 0.3% weaker and Germany’s DAX was 0.1% lower.

The Stoxx 600 basic resources index reversed early gains to trade down 1.1%, while the sub index for the oil and gas sector was also in the red, as commodity prices remained firmly on investors’ minds following a big drop in oil and metals prices on Tuesday.

“Weak German import data and China slightly devaluing the yuan overnight is adding to the negative sentiment,” said Markus Huber, senior analyst at Peregrine & Black.

“Both are sending out clear reminders that neither the Eurozone nor the Chinese economy is necessarily doing very well at the moment. Adding to the downside momentum and causing swings to be larger than usual for this time of the year are some traders who have positioned themselves early this year and have accumulated large long position in anticipation of a year-end rally and who are now forced to scale back on their risk exposure.”

The People’s Bank of China guided the yuan down to its weakest level in more than four years on Wednesday as heavy outflows and an economic slowdown weighed on the currency.

The yuan's mid-point was set at 6.414 per dollar – its lowest level since August 2011.

On the data front, figures released earlier by the Federal Statistics Office showed seasonally-adjusted exports in Germany fell 1.2% in October, while imports dropped 3.4%. Both falls were a lot sharper than expected.

In corporate news, German chemical and pharmaceutical company Bayer was weaker after European and US drug safety agencies said they were investigating whether a drug trial was affected by a defective blood-clotting test device.

Oil refiner Neste slid after warning that a technical issue at its Porvoo refinery would lead to a production loss of tens of millions of euros.

Anglo American tanked again as analysts assessed the implications of the “radical” portfolio restructuring and scrapping of the dividend announced on Tuesday. Jefferies downgraded its stance on the stock to ‘underperform’ from ‘hold’ and took an axe to the target price, cutting it to 275p from 635p, saying an equity issuance may still be needed.

On the upside, Ashtead was the best performer on the Stoxx 600 index after the equipment rental company reported a positive start to the year, with first half revenue growth of 18% driven by a strong second quarter.

Volkswagen was a high riser following reports that investigations by the company have shown it understated carbon dioxide emissions in fewer cars than originally thought.

The data calendar is fairly light, with US wholesale inventories the highlight at 1500 GMT.