Europe open: Stocks weaker as investors sift through earnings

European stocks fell in early trade following uninspiring US and Asian sessions, as investors sifted through earnings reports.

At 0850 BST, the benchmark Stoxx Europe 600 index was down 0.8%, Germany’s DAX was 0.6% weaker and France’s CAC 40 was off 0.7%.

At the same time, oil prices were steady, with West Texas Intermediate and Brent crude up 0.1% to $40.09 a barrel and $42.19, respectively.

In corporate news, Commerzbank was a touch weaker after scrapping its profit target for this year and saying profit and net income will fall.

Metro nudged down after the retailer’s third-quarter sales and profit missed analysts’ expectations.

Deutsche Lufthansa flew a little lower as it posted a jump in earnings for the first half but warned of a tougher second half.

German car maker BMW was in the red despite reporting better-than-expected second-quarter profit.

Chip maker Infineon Technologies was under pressure after its third-quarter profit and sales fell short of estimates.

InterContinental Hotels edged higher as it retained its bullish outlook for the year but said earnings in the first half were hit by the stronger US dollar.

In terms of sectors, banks were under the cosh again, with the Stoxx 600 sub-index down 2.1% as investors continued to mull over the latest European stress tests released on Friday.

Investors were also digesting the Reserve Bank of Australia’s decision to cut interest rates by 25 basis points to a new record low of 1.5%.

Oanda’s Craig Erlam said: “The 25 basis point rate cut from the RBA, taking the cash rate to an all-time low of 1.5%, was all-but priced in it would appear and came as little surprise to investors.

“It seems the persistent low levels of inflation tipped the RBA over the edge, with slow global and moderate domestic growth, and the stronger Australian dollar also contributing to the decision to loosen monetary policy further.”

Still to come on the data front, eurozone inflation is at 1000 BST. In the US, personal income and spending and the PCE deflator are at 1330 BST.