Europe open: Weak Chinese data weigh on major benchmarks

European markets began the session moving lower following the release of a spate of weaker-than-expected economic data out of China over the weekend and amid light trading conditions as a result f public holidays in Germany and France.

As of 08:51 BST the benchmark DJ Stoxx 600 was lower by 0.53% to reach 332.91, while the Cac-40 was off by 0.95% or 40.96 points to 4,279.03 alongside a loss of 0.81% or 144.43 points to 17,585.02 for the FTSE Mibtel.

The Frankfurt Stock Exchange was closed for trading on Monday in observance of a bank holiday.

On the previous Friday European stocks finished higher despite the losses seen on Wall Street.

Figures published on 14 May revealed that Chinese industrial production, retail sales and fixed asset investment all slowed down in April from March.

Overnight, the Shanghai Stock Exchange’s Composite Index finished the session higher by 0.84% to 2,850.862.

The rate of growth for industrial production slowed from 6.8% year-on-year clip in March to a 6% year-on-year pace in April, according to the National Bureau of Statistics.

That was less than the 6.5% rise which economists had forecast.

Chinese retail sales expanded by 10.1%, undershooting expectations for a gain of 10.5%, while fixed asset investment was up by 10.5% over the year to April, missing economists’ projections for growth of 11%.

Following the data, and also weak headline number on Chinese lending the previous day, the Peoples Bank of China issued a statement explaining that said lending and credit figures had been distorted by a programme to allow local governments to swap more expensive debt for municipal bonds.

“Overall, although the data for April has been mixed, we think there are more positives than negatives. […] But with the impact of earlier policy loosening yet to be fully felt, we think there is enough stimulus already in the pipeline to support a recovery until the end of the year,” Capital Economics said in a research note sent to clients on Monday morning.

Shares in Telecom Italia were moving higher despite the telecommunications group having reported a 7.5% drop in group earnings before interest, taxes, depreciation and amortisation to reach €1.79bn, after a 5.6% fall in sales to €4.18bn.

French pharma giant Sanofi was planning to move ahead with the replacement of US outfit Medivation’s board of directors after the oncology treatment maker refused to engage in talks over a proposed $9.3bn buy-out, people familiar with the matter told Reuters.

Standard&Poor’s downgraded the long-term credit ratings of EdF from A+ to A.

Euro/dollar was edging higher by 0.05% to 1.1314 and front month Brent crude futures were gaining 2.068% to reach $48.84 per barrel on the ICE.