Europe open: Shares muted as China export data rattles investors

European shares were struggling for direction on Wednesday, after a slump in exports from China last month dented sentiment.

The pan-European Stoxx 600 was down 0.04% at the open, with all major bourses off the pace.

China’s exports fell last month in another indication that the rebound in the world’s second-largest economy was losing steam.

Exports fell by 7.5% in May to $283.5bn on an annual basis, a sharp reversal from the increase of 8.5% in April, data released by China Customs showed.

The May figure was below the expectations of a fall of 0.1%. Imports fell by 4.5% to $217.7bn, up from a fall of 7.9% in April, and above expectations of a 6.8% fall.

"This is being taken as fresh evidence of China’s bumpy recovery from the pandemic and another sign that the snap back in activity is waning sharply," said Hargreaves Lansdown analyst Susannah Streeter.

"Higher inflation in key markets, is likely to be part of the picture, given that the tightening of monetary policy is designed to curtail consumer spending power and with people buying fewer goods that they want but don’t necessarily need, Chinese exports are becoming casualties."

In corporate news, shares in Inditex gained after the Zara brand owner reported a 16% jump in sales of its spring-summer collection.

Danske Bank shares rose after the Danish lender raised its long-term earnings target.

Atos was also a riser after the IT firm forecast sales at loss-making unit Tech Foundations to hit bottom in 2024.

Reporting by Frank Prenesti for Sharecast.com