Europe midday: Shares flat as German data, UK Covid fears worry investors
European stocks were flat at midday on Tuesday as weak German industrial output data kept a check on sentiment.
Major European bourses were lower, with only the UK's FTSE marginally in positive territory.
Data showed German industrial output fell unexpectedly in April driven by a lack of semiconductors, timber and other intermediate goods in another indication of supply bottlenecks holding back the country’s economic recovery.
The Federal Statistics Office said industrial output dropped 1% on the month after a downwardly revised increase of 2.2% in March. Analysts had been looking for a rise of 0.5%.
Investors were also concerned after a report in the UK Times newspaper reported that Britain’s next phase in easing of lockdown on June 21 could be delayed by a fortnight amid concerns over the spreading of new variants of the virus after the government failed to close borders to counter the Indian strain of Covid.
"The truth is markets seem to be bobbing along pretty happily until there is the next big short-term risk scare – a well-understood, or at least fairly static, macro picture for the time being keeping things on an even keel," said Markets.com analyst Neil Wilson.
"Inflation remains the big unknown but for now, bond yields are steady - US Treasury yields continue to look pretty calm around 1.55% - but the path for bond yields seems only higher this year. The question is one of timing and markets seem happy to wait until they get a clearer signal."
Wilson said investors would be eyeing Thursday's European Central Bank meeting and US CPI inflation print.
The ECB was expected to maintain emergency bond purchases programme at the current pace on indications the euro zone is not recovering as fast as expected, while the inflation reading would be the last key data ahead of the US Federal Reserve meeting next week.
In equity news, shares in Intermediate Capital Group topped the Stoxx as the company increased its fundraising target after exceptional performance by its investment arm caused annual profit to more than quadruple.
UK tobacco giant BAT rose as the company increased its guidance for annual revenue growth as it attracted more non-combustible product customers and reported a solid performance for its tobacco brands.
Aviva shares gained after activist investor Cevian Capital said it had built a 4.95% stake in the insurer and called on it to return £5bn to shareholders next year.
Swiss contract drugmaker Lonza gained 4.66% after a Goldman Sachs upgrade to ‘buy’.
Dechra Pharmaceuticals rose after reporting that full-year revenue was set to be ahead of consensus expectations, as it continues to benefit from strong market fundamentals and lower costs.