Europe open: Stocks slip as rally loses steam and German data disappoints

European stocks fell into the red in early trade following strong gains in the previous session, as investors mulled over some disappointing German data.

“Despite Asia moving higher overnight and the US showing a strong close somewhat disappointing German factory orders are dampening the overall positive sentiment a bit," said Markus Huber, senior analyst at Peregrine & Black. "Still, in light of the financial turmoil in recent weeks and concerns about the slowdown in China it doesn’t come as too much of a surprise if some of the Eurozone data due to be released in the days and weeks ahead might be showing some temporary weakness and therefore should be already priced into the markets to a huge degree.”

Equity markets in Europe racked up solid gains on Monday as investors bet that Friday’s weaker-than-expected non-farm payrolls release would push back the timing of a rate hike by the Federal Reserve.

Early on Tuesday, however, the rally ran out of steam. At 0900 BST, the benchmark Stoxx Europe 600 index and France’s CAC were both down 0.4%. Germany’s DAX underperformed slightly, down 0.6% after data showed industrial orders unexpectedly fell in August.

Figures released by Destatis showed German orders were down 1.8% on the month, compared with expectations for a 0.5% increase. July’s drop, meanwhile, was revised down to 2.2% from 1.4%.

On the corporate front, French mobile operator Bouygues Telecom rose after the company said it aims to improve its profit margins and sales in the coming years as it looks to defend its standalone strategy.

French media group Vivendi rallied after raising its stake in Telecom Italia to 19.9%.

In London, SABMiller fell following a trading update for the six months to 30 September. The company said group net producer revenue rose 4% after a strong second quarter, but dollar fluctuation proved to be a bit of a drag.

Low cost airline Easyjet edged lower despite posting growth in passenger numbers and load factor in September.