Europe open: Shares flat as German, UK data weighs; Hays tanks

European shares were flat at the open on Tuesday as investors digested weak economic data from Germany and the UK and eyed US inflation numbers later in the week, while British recruitment company Hays tanked on a profits warning.

The pan-European Stoxx 600 had barely moved the needle at 478.23 with major bourses mixed. US and Asian shares were higher overnight.

“The next leg of the interest rate debate will follow later in the week, with the release of the (US) consumer price index reading on Thursday and the producer price index on Friday,” said Interactive Investor head of markets Richard Hunter.

“Investors will be keen to see whether there is further progress towards the Fed’s 2% stated aim, or indeed whether the last mile towards hitting the target will be the hardest, as some fear.”

In economic news, German industrial production registered an unexpected fall in November, making it the six straight month of declines as manufacturing in Europe's biggest economy continued to struggle.

UK Retailers finished 2023 on the back foot, industry data showed on Tuesday, despite a modest uptick in demand in the week leading up to Christmas.

According to the latest BRC-KPMG Retail Sales Monitor, UK total sales increased by just 1.7% in the five weeks to 30 December, compared to a 6.9% rise a year previously.

In equity news, Hays tumbled as it warned on profits after a hiring slowdown in December. In an update for the three months to the end of December, the company said group net fees were down 10%, having fallen 15% in December.

As a result, and despite ongoing actions to reduce costs, the recruiter now expects first-half pre-exceptional operating profit of around £60m, which is below consensus expectations of around £73m.

B&M European Value Retail fell despite reiterating its full-year guidance on Tuesday and declared a special dividend, as it posted a 5% jump in third-quarter sales.

Reporting by Frank Prenesti for Sharecast.com