Europe open: Stocks dip amid weak Chinese data, tensions in Persian Gulf

Stocks are moving lower at the end of the week, weighed down by a spate of mixed readings for the Chinese economy in May and amid heightened tensions in the Persian Gulf.

"Despite the head-turning events in the Middle East, the relationship between China and the US remains the key determinant of market movement given its knock-on effect on global trade and growth," said IG's Chris Beauchamp.

Indeed, Beauchamp and some other analysts appeared to be hopeful that improved US-China trade relations were possible.

As of 0958 BST, the benchmark Stoxx 600 was down 0.48% at 378.51, alongside a drop of 0.66% to 12,088.49 for the German Dax, while the Cac-40 was off by 0.26% to 5,361.66.

Basic Resources firms were weaker on the back of the news out of China, with the corresponding Stoxx 600 sector gauge off by 1.21% to 443.83.

Data out of China overnight had revealed weaker-than-expected prints for industrial production and fixed asset investment in May, with the former printing at up by 5.0% year-on-year in May, versus a consensus estimate for an increase of 5.4%, and the latter at 5.6% versus the 6.1% anticipated.

Nonetheless, commenting on the FAI figures, Freya Beamish at Pantheon Macroeconomics said: "More positively, secondary industry investment growth ticked up. That won't last in the current trade environment, but we expect an improvement in international trade relations soon."

Retail sales in China on the other hand grew at a year-on-year pace of 8.6% in May (consensus: 8.1%), following a rise of 7.2% in April.

Also overnight, the US accused Iran of being complicit in the previous day's attacks on two more tankers in the Persian Gulf.

Brent crude oil futures initially edged higher on Friday morning, but were last trading down by 0.41% at $61.06 per barrel on the ICE on the back of concerns around the global demand picture.

Reflecting those concerns, in its latest monthly report, the Energy Information Administration cut its forecast for global demand growth in 2019 by 100,000 barrels a day to 1.2m b/d.

Gold on the other hand found a bid and it was sticking, with the August COMEX contract climbing 1.03% to $1,357.60/oz..

On the corporate side of things, stock in Bayer was drifting lower after Bayer announced plans to invest roughly €5.0bn to develop alternatives to the Roundup weedkiller it acquired after its purchase of US rival Monsanto; however, a company spokesman said those funds did not represent new spending.

The Russian central bank was set to announce its decision on interest rates at 1230 BST, with the monetary authority expected to lower its one-weel repo rate by 25 basis points to 7.50%.

For later in the session, monthly retail sales figures covering the month of May are scheduled for release at 1330 BST, followed by a reading on industrial production during that same month at 1415 BST and for consumer confidence in June at 1500 BST.