Europe open: Stocks nudge lower as German data disappoints; Yellen comments in focus

European stocks nudged lower in early trade following the release of disappointing German data and as investors digested hawkish comments from Federal Reserve chairwoman Janet Yellen.

At 0915 GMT, the benchmark Stoxx Europe 600 index was down 0.3%, France’s CAC 40 was down 0.1% and Germany’s DAX was 0.3% lower.

On Wednesday, Yellen said before the House financial services committee that the US economy was performing well and a rate hike next month was still a “live possibility”.

"The committee does feel that moving in a timely fashion if the data and outlook justify such a move is a prudent thing to do because we will be able to move at a more gradual and measured pace," Yellen said.

Her comments soured the mood on Wall Street, pushing stocks to a weaker close.

Following Yellen’s comments, investors will be especially keen to hear what European Central Bank chief Mario Draghi has to say later on Thursday when he gives a speech in Milan, with market participants hopeful he will stick to his dovish tone.

Data released earlier by Destatis showed German factory orders unexpectedly fell in September, by 1.7% month-on-month versus expectations for 1% growth.

“German new orders in the manufacturing sector declined strongly again for the third consecutive month,” said UniCredit.

“In 3Q15 as a whole, it was the worst performance in the last four years. Despite these ugly headline figures, we think that there is no reason to panic. They are distorted on the downside by big-ticket items (September) and a working-day effect (August). A strong technical rebound in October in the range of plus 2%-3% is likely.”

On the corporate front, pharmaceuticals giant AstraZeneca was a high riser. Although third quarter revenues were hit by foreign exchange movements, investors cheered its decision to upgrade the revenue outlook for the year.

RSA Insurance was also on the front foot after posting a 1% rise in underlying premium income in the first nine months of the year and saying its turnaround plan is on track.

Vestas Wind Systems advanced after its third quarter operating profit came in ahead of expectations and the company lifted its profit outlook for the year, while Societe Generale rallied as it said third quarter income grew 2.4%.

Adecco fell sharply, however, after the staffing group reported a surprise half-billion euro net loss in the third quarter on impairments.

UK supermarket retailer Wm Morrison was also under the cosh as it said third quarter like-for-like sales fell at a faster rate than in the previous quarter and worse than expectations.

Still to come, investors will eye the release of Eurozone retail sales at 1000 GMT. In the US, nonfarm productivity and initial jobless claims are at 1330 GMT.

Investors in the UK will watch out for the Bank of England rate announcement and Inflation Report at 1200 GMT. Although no change in policy is expected, both will be scrutinised for any clues as to the timing of policy tightening and a rate hike.