Europe open: Stocks fall as ex-divs drag on corporate news

European shares were lower at the open as heavyweight stocks trading ex-dividend dragged on the benchmark Stoxx 600 index and investors digested US CPI data from Wednesday.

The pan-regional Stoxx 600 index was down 0.03% to 524.54 with all major bourses lower.

US inflation rose 0.3% in April, below the 0.4% rise forecast although consumer prices were still 3.4% higher than a year ago.

“The overall mood remains bright though, with losses relatively minimal. That’s thanks to that inflation data - while the path to disinflation was never going to be without bumps, this latest indicator suggests things are moving in favour of Federal Reserve interest rate cuts this year – albeit this can change at short notice,” said Hargreaves Lansdown analyst Sophie Lund-Yates.

Japan’s economy unexpectedly shrank in the first quarter as consumers tightened their belts in response to stagnant wage growth, companies cut spending and exports fell.

Gross domestic product contracted 2% on an annualised basis in the three months to March 30, the Cabinet Office said on Thursday. The figure compared with a forecast contraction of 1.2% and now clouds the outlook for the Bank of Japan’s plans to lift interest rates.

In equity news, auto giants BMW and Daimler Truck fell as they traded without entitlement to a dividend.

Sage Group shares were well into the red on Thursday morning, despite reporting a robust first-half performance, as the company downgraded its guidance.

BT Group surged as the company reported better-than-expected cash flow and lifted its dividend.

Watches of Switzerland gained 15% on a rise in fourth-quarter sales.

Reporting by Frank Prenesti for Sharecast.com