Europe open: Shares weak on German consumer worries, Covid, US stimulus

European stocks were weaker at the opening on Thursday as falling German consumer sentiment, growing coronavirus cases and the US stimulus stalemate worried investors.

The pan-European STOXX 600 slipped 0.8% by, with the German DAX down more than 1% after a survey revealed consumer morale fell heading into the pre-Christmas period on fears of a second coronavirus.

Investor sentiment has been hit this week as Europe sees Covid-19 cases on the rise and the reintroduction of restrictions, with Spain recording 1 million infections and Italy hitting a record increase in daily cases.

"As far as a US stimulus package is concerned the penny appears to be finally dropping that there is unlikely to be a plan that will be able to get past the Republicans in the US Senate, even if Nancy Pelosi and Steve Mnuchin were able to put something down on paper, in their various short phone calls over the past few days," CMC Markets analyst Michael Hewson said.

Solid earnings and trading statements helped arrest a more sever slide in equities. Unilever shares rose after the company reported a stronger-than-expected return to quarterly sales growth, led by emerging markets and demand for hygiene and food products at home.

French spirits maker Pernod Ricard were up as the company said sales would return to growth in the second half of its 2020/2021 fiscal year.

Rentokil Initial rallied after it said third-quarter revenue rose thanks to a "exceptional" growth in the hygiene business, which continued to benefit from high demand for disinfection services, and a return to growth in pest control.

Airline group IAG fell as it posted a huge €1.3bn third quarter loss and said it would not meet its goal of being breakeven on cash flow in the fourth quarter as it cut capacity to 30%.