Europe open: Stocks mostly lower but Syngenta surges on Chinese deal

European stocks were mostly lower in early trade following downbeat sessions in the US and Asia.

At 0850 GMT, the benchmark Stoxx Europe 600 index was down 0.2%, Germany’s DAX was 0.5% weaker and France’s CAC 40 was flat.

“European equities are seeing early follow-through selling this morning on the back of yesterday's sharp decline. Even much better than expected Chinese Services PMI data released overnight failed to provide markets with much needed optimism,” said Markus Huber, senior analyst at Peregrine & Black.

“Whilst overall sentiment remains negative, many major indices are approaching again the lows of 2016 and 2015 and therefore major support levels. So far markets are still stuck in a wide consolidation pattern however much lower prices might be needed in order for sentiment to turn and bargain hunters to be tempted back into the markets.”

Data released earlier showed activity in China’s services sector expanded at a faster pace last month.

The Caixin China services purchasing managers’ index rose to 52.4 in January from 50.2 the previous month, marking its highest level in six months.

Meanwhile, oil prices recovered following heavy losses on Tuesday, with West Texas Intermediate up 0.9% at $30.14 a barrel and Brent crude 0.7% higher at $32.94.

In corporate news, Syngenta surged after the Swiss agrichemical group agreed to be snapped up by ChemChina in a $43bn deal.

Luxury group LVMH rallied after its 2015 profit and revenue exceeded analysts’ expectations.

In London, AstraZeneca nudged lower despite winning European regulatory approval to market its Tagrisso-branded tables for the treatment of adult patients with certain forms of lung cancer.

Shares in Finnish utility company Fortum tumbled after it reported a bigger-than-expected decline in fourth-quarter earnings.

KPN was also in the red after the Dutch telecom group’s fourth quarter numbers missed expectations.

Still to come on the macroeconomic calendar, the US ADP employment report is at 1315 GMT, while Markit US services PMI is at 1445 GMT and US ISM non-manufacturing is at 1500 GMT.