Europe midday: Stocks slip as service sector surveys point to sharp GDP fall

Stocks across the Continent were sent sharply lower at the end of the week by services sector surveys that economists said pointed to an already steep and worse than expected drop in economic activity.

"European markets are turning lower today, with a host of weak services PMI surveys in Europe expected to be followed up by a similarly shocking US jobs report this afternoon," said IG's Josh Mahony.

"Yesterday's huge volatility in crude is unlikely to be the last, with traders awaiting signs that US and G20 countries will join the global production cut needed to get Russia and Saudi Arabia on side."

As of 1155 GMT, the benchmark Stoxx 600 was down 0.59% at 310.24, alongside a 0.23% dip for the German Dax to 9,549.18, while the FTSE Mibtel was off by 1.22% at 16,6285.42.

In parallel, front month Brent crude oil futures were jumping by nearly 7.5% to $32.35 a barrel on the ICE.

IHS Markit's services sector Business Activity Index for March slipped further still versus a preliminary reading published two weeks before, from 28.4 to 26.4 and against a final reading of 52.6 for February.

According to the survey compiler's chief economist, Friday's data was consistent with the euro area's economy already shrinking at an annualised clip of 10%.

"While employment is not yet falling as fast as seen during the financial crisis, the coming months will no doubt see jobless numbers rise sharply, even as governments across the eurozone seek to limit these," said Chris Williamson, chief business economist at IHS Markit.

"However, the ultimate economic cost of the COVID-19 outbreak cannot be accurately estimated until we get more clarity on the duration and scale of the pandemic."