Europe open: Stocks slip on negative Asian lead but losses limited

European stocks were a little weaker in early trade, taking their cue from a downbeat session in Asia.

At 0850 GMT, the benchmark Stoxx Europe 600 was down 0.4%, Germany’s DAX was 0.2% lower and France’s CAC 40 was down 0.3%.

Earlier, the Shanghai Composite tumbled 5.5% as it emerged several brokerages in China were being investigated for alleged violation of securities regulations.

However, losses in Europe were limited as sentiment was underpinned by expectations that the European Central Bank will announce further easing measures at its meeting next week.

“With the ECB having stoked expectations about a significant further expansion of its non-conventional operations, we have long held the view that the ECB would, if anything, look to over-, rather than under-deliver at its meeting on 3 December,” said BNP Paribas.

Friday’s session is likely to be fairly quiet, with thinner volumes than usual as the US market is only open for a half day due to the Thanksgiving holiday.

On Thursday, China’s largest stockbroker Citi Securities Co and the country’s third largest broker, Guosen Securities, revealed they were being investigated for suspected violations.

Both brokerages said they would cooperate fully with the investigations, adding that there would be no impact on their current operations.

It was also reported that brokerage Haitong Securities was being investigated. It issuing a trading halt after the market opened without citing reasons.

The investigations are part of a broader clampdown on how brokerages finance clients’ stock purchases.

Asian markets were also weighed by data showing Japanese inflation fell for the third month in a row in October and figures showing Chinese industrial profits dropped 4.6% in October from a year earlier, marking the fifth consecutive month of decline.

In terms of sector, miners suffered the brunt of the losses, with the Stoxx 600 basic resources index down 1.7%.

Rio Tinto was on the back foot after the miner said it has approved the $1.9bn expansion of its high-quality Amrun bauxite project in Queensland's Cape York Peninsula, with much of the capital expenditure scheduled for 2017 and 2018 and first delivery from 2019.