Europe open: Stocks fall; telecoms under pressure

European stocks fell in early trade, with telecoms issues under pressure as investors looked to the release of some key data points.

At 0900 BST, the benchmark Stoxx Europe 600 index was down 1%, Germany’s DAX was off 0.7% and France’s CAC 40 was 1.1% weaker.

At the same time, oil prices were in the red. West Texas Intermediate was down 1.1% to $37.91 a barrel and Brent crude was 0.7% lower at $39.00.

“A mix of light profit-taking and receding upside momentum is putting a bit of pressure on stocks early on,” said Markus Huber, senior analyst at Peregrine & Black.

“With tomorrow’s crucial US nonfarm payrolls data being released and stocks having had a fairly good run so far this week, some traders are willing to take some money off the table.”

In corporate news, French telecommunications stocks were under the cosh after Orange and Bouygues Telecom said they have extended the deadline to complete their tie-up to Sunday amid disagreements over the value of the telecoms unit.

On the upside, Tui rallied after saying overall demand and pricing for holidays has remained resilient in the first half of its financial year. Tui said it has sold 47% of its summer holiday programme, in line with last year, and at 1% higher average selling prices, meaning revenue from the programme has been lifted 3%.

On the data front, German retail sales unexpectedly fell in February, according to figures released by Destatis on Thursday.

Retail sales were down 0.4% compared with the previous month, missing expectations of a 0.3% increase.

Meanwhile, January’s figures were revised lower to show a 0.1% drop compared with the 0.7% growth initially estimated.

Compared with the same month a year ago, however, retail sales rose 5.4%, which was a much bigger increase than the 2.2% forecast by economists.

Still to come on the macroeconomic front, Eurozone inflation data is at 1000 BST. In the US, initial jobless claims are at 1330 BST while Chicago PMI is at 1445 BST.

Huber said the main focus will be on the release of the Chicago PMI.

“Traders are especially eager to see if the Chicago PMI will be able to rebound after last month's reading of well below the important 50 level. Another weak reading could stir major worries concerning overall US growth in the months ahead.”